1. introduction cm 2014

COTM 5104: CONSTRUCTION MANAGEMENTChapter 1

Introduction

GETANEH GEZAHEGNEMarch 2014

School of Civil and Environmental Engineering

ContentsContents

Introduction

1. Construction Industry

2. Domestic Construction Industry

3. Fundamentals of Management

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G. 2

1. Construction Industry1. Construction Industry1.1. General Construction: is a process of constructing something by

man for one purpose or another. It may be a road, bridge, dam, dwelling place, an airport, commercial building, etc.

Construction types: Residential buildings; Institutional and commercial buildings; Specialized industrial construction; and Infrastructure and heavy construction. Construction Industry (CI)) is an industry which is

involved in the planning, execution and evaluation of all types of civil works.


1. Construction Industry1. Construction Industry1.1. General Project: is some form of human activity that has a

beginning, a productive phase and an end, creating something that did not exist before.

Construction Project: is an investment of scarce resources with a definite objective, time horizon and geographical boundary.

Construction projects are mostly constructed on the ground and exposed fully to the local environment.

A construction project has different scale and complexities. It ranges from improvements to large investments. But, every project is:

An investment of resources, and A cause of irreversible change.


1. Construction Industry1. Construction Industry1.1. General Common characteristics of construction projects: It has a specific starting and finishing time. It has usually geographical and sometimes

organizational boundary. It has clearly defined set of objectives. It entails the investment of scarce resources in the

expectation of future benefits. It may be planned, financed and implemented as a unit.


1. Construction Industry1. Construction Industry1.2. Study of Construction Study of Construction mainly covers two themes:1. Construction Technology: Relates to methods and techniques

used to place the physical materials and elements of construction at the Job site.

2. Construction Management: Addresses how available resources will be applied.


Money Manpower

Materials Machines

1. Construction Industry1. Construction Industry1.2. Study of Construction Many great construction projects

mark significant milestones in human history:

1. Great Pyramids; 2. Brooklyn Bridge; 3. Panama Canal; and4. Euro/channel tunnel.


1. Construction Industry1. Construction Industry1.3. Construction Industry Category Construction Industry can be categorized into three major

sectors: i.i. Transport and Communication Sector Transport and Communication Sector - Road, Railway,

Airway, and Telecommunication related physical works;ii.ii. Water and Energy Works Water and Energy Works – Hydropower development,

transmission lines, wind power, irrigation projects; and iii.iii. Buildings and Other Physical InfrastructuresBuildings and Other Physical Infrastructures. CI is among the leading industry in producing

employment and contribute to the over all national development.


1. Construction Industry1. Construction Industry1.3. Construction Industry Category


Transportation Infrastructure

Urban development

Energy supply

Water supply

The ConstructionThe Construction IndustryIndustry

1. Construction Industry1. Construction Industry1.4. Construction Industry Attributes1.4.1 Nature of Construction Industry:1.4.1 Nature of Construction Industry: Requires big capital investment thus is highly affected by

the economy of the nation. Consumes much of the national budget in developing

countries like Ethiopia.


World Total 3.41 Trillion $

Asia 1,113 Billion $

Europe 1,017 Billion $

North America 885 Billion $

Latin America 241 Billion $

Middle East 101 Billion $

Africa 56 Billion $

1. US $819 B (8.2%)

2. Japan $618 B (13.9%)

3. Germany $253 B (11.4%)

4. China $181 B (17.0%)

5. UK $109 B (7.7%)

Ethiopia $ 402 M(59.8%)

1. Construction Industry1. Construction Industry1.4. Construction Industry Attributes1.4.1 Nature of Construction Industry:1.4.1 Nature of Construction Industry:A. Nature of production:A. Nature of production: mainly on site. Changing supply-chain relationship and production site. Exposed to inclement weather condition. Seasonal disruption. Health and safety concerns.

B. Nature of product B. Nature of product Large, heavy, durable, expensive, heterogeneous, and

immobile.


1. Construction Industry1. Construction Industry1.4. Construction Industry Attributes1.4.1 Nature of Construction Industry:1.4.1 Nature of Construction Industry:C. Demand for the productC. Demand for the product Demand is usually driven by ‘other’ goods and services;

not controlled by industry, In the majority of cases, clients define requirements

before the industry provides it, Time lags between demand and supply is long.D. The WorkforceD. The Workforce The industry is, by its very nature, an overwhelmingly

domestic and labor-intensive industry despite the advancement in modern technologies.

Construction is a team output and requires motivated and skilled workers.


1. Construction Industry1. Construction Industry1.4. Construction Industry Attributes1.4.2 Uniqueness of Construction Industry:1.4.2 Uniqueness of Construction Industry: Fragmented industry;


Need Design Bid Build

Client ClientA/E Contractor

Fragmented project participants

Sequential process

1. Construction Industry1. Construction Industry1.4. Construction Industry Attributes1.4.2 Uniqueness of Construction Industry:1.4.2 Uniqueness of Construction Industry: Long production cycle;


1. Construction Industry1. Construction Industry1.4. Construction Industry Attributes1.4.2 Uniqueness of Construction Industry:1.4.2 Uniqueness of Construction Industry: Large uncertainty; Transient organization nature; Unpredictable work load; and Subject to environmental impact.


1. Construction Industry1. Construction Industry1.5. Roles of Construction Industry Construction Industry is the most important enabler for

social, economic and political development of countries. It provides the basis upon which other sectors can grow

by constructing the physical facilities required for the production and distribution of goods and services.

Specifically this fact is true for least developing countries like Ethiopia because projects are:

Inter-sectoral; Source of employment; and Demands huge capital budget.


1.6. Construction Project Lifecycle The project life cycle of a construction project may be viewed as a

process through which a project is implemented from cradle to grave.

1. Construction Industry1. Construction Industry

17

Definition of project objectives and scope

Conceptual plan or preliminary design

Plans and specifications

Completion of construction

Acceptance of facility

Fulfillment of useful life

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G.

1. Construction Industry1. Construction Industry1.7. Stakeholders of Construction sector Stakeholders of Construction sector: Construction Industry involves many people, organization, agencies,

ministries, designers, contractors, project managers, equipment suppliers, material suppliers, testing Laboratories, etc.


ContractorContractor

ArchitectArchitect

EngineerEngineer

SuppliersSuppliers

SubsSubs

VendorsVendors

PublicPublic

OwnerOwner

1. Construction Industry1. Construction Industry1.7. Stakeholders of Construction sector Contractual stakeholders: Employer/Client, Consultant/Engineer, and Contractor. Non-contractual stakeholders: Public agencies: Statutory Agencies (EEPCo, AAWSA,

Fire Authority), Public authorities and Municipalities (land and building permit),

Suppliers, and End users etc.


1. Construction Industry1. Construction Industry1.7. Stakeholders of Construction Sector1.7.1 Employer/client Employer/Client is the initiator and owner of the project (it

can be public or private client). The client is the most important party who is active from

inception to completion and event to post-occupancy maintenance.

Duties of the client encompass the following: Availability and cost of land, Location & accessibility Required Infrastructure Legal constraints Current & future development Soil characteristics of land Site preparation (right of way) Permits


1. Construction Industry1. Construction Industry1.7. Stakeholders of Construction Sector1.7.2 Consultant The main role of the consultant is to interpret the client’s

project requirement into a specific design and possibly the supervision.

The consultants’ team shall: Ascertain, interpret and formulate the client’s requirement into an

understandable project. Design the project to much requirements and constraints (imposed by

statutory obligations, technical feasibility, environmental factors, site conditions, cost, etc)

Assess client’s cost limit to decide on materials & the like. Prepare contract documents. Supervise the project and constantly inform the client on the progress Approve payments Resolve contractual disputes Issue provisional and final acceptance certification


1. Construction Industry1. Construction Industry1.7. Stakeholders of Construction Sector1.7.3 Contractor These are groups established mainly as commercial

companies, that contract to construct development projects. Responsibility of contractors: Carry out a full site investigation prior to submission of tender, Submit tender, Plan, Program, Control the construction process. Notify the consultant about delays, discrepancies, Effect all payments to his employees, suppliers, subcontractors, Rectify all defects on completion of works, etc Provide post occupancy repair and maintenance if required.


1. Construction Industry1. Construction Industry1.8. Resources for Construction Industry The following resources are vital that make up an integral

components for construction industry: Human Resources (Labor or Workmen); Financial Resources ( Fund); Information Resources; Physical Resources ( Materials, Equipment and Other

Assets); and Services and Management.


2. Domestic Construction Industry2. Domestic Construction Industry2.1. Domestic Construction Industry: Historical Aspect Previous monarchies had contributed to the development of

construction in Ethiopia. Historic chronicles of the 17th and 18th centuries showed

that there were a number of small roads, palaces and river improvement works.

Among the Emperors Atse Fasil, Atse Tewodros and Atse Menilik were noted for their major contributions.


2. Domestic Construction Industry2. Domestic Construction Industry2.1. Domestic Construction Industry: Historical Aspect Modern construction however had started during the reign

of Emperor Menilik II (The road from Addis Ababa to Addis Ababa to AsmaraAsmara).

Italy during its invasion (1936-19411936-1941) had also contributed to the development of the construction industry. It had constructed about 6000km6000km of roads.

After Italian invasion, the first Ministry called “Ministry Ministry of Communication and Public Worksof Communication and Public Works’’ was established during the Imperial regime.


2. Domestic Construction Industry2. Domestic Construction Industry2.1. Domestic Construction Industry: Historical Aspect The construction development can be reviewed into six

distinct periods based on the historical paradigm shifts in the construction industry in Ethiopia:

i. Pre 1968: Foreign Companies dominated construction Industry. ii. 1968-1982: Emergence of Small scale Domestic construction

companies, iii. 1982-1987: Parastatal companies dominated Construction

Industry, iv. 1987-1991: Fragmentation between Design services &

Construction works, v. 1991-2001: Parastatal Domination legally abolished, and re-

emergence of private construction companies, vi. 2001- to date: Integration and Capacity Building.


2. Domestic Construction Industry2. Domestic Construction Industry2.2. Current Status of Local Construction Industry Current status of the construction industry is

distinguished by: Lack of clear developmental objectives for the industry; Inadequate co-ordination of planning between the industry and

infrastructure programs in the various sectors of the economy; Heavy dependence on foreign resources such as materials,

equipment and expertise, which continue to be supplied to a major extent by foreign consultants and contractors;

Transport bottlenecks to the distribution of construction materials and equipment;

Inadequate relevant local construction regulations and standards;


2. Domestic Construction Industry2. Domestic Construction Industry2.2. Current Status of Local Construction Industry Current status of the construction industry is distinguished

by: Control of the construction sector by small-to-medium sized firms

and parastatal construction enterprises operating at low levels of capacity and with inadequate working capital;

Inadequate and ineffective organizations representing the interests of contractors, consultants and engineers;

Inadequate numbers of suitably qualified and experienced personnel, at all levels: engineers, technicians, mechanics, operators and foremen etc.;

Inadequate consideration given to the use of local resources (including community participation in labor-based works);

Little consideration given to the concept or cost of maintenance as a component of investment costs.


2. Domestic Construction Industry2. Domestic Construction Industry2.2. Current Status of Local Construction Industry The general state of the domestic construction industry

in Ethiopia is characterized by the following five major deficiencies:

An inadequate capital base; Old and limited numbers of equipment; Low levels of equipment availability and utilization; Deficiencies in technical, managerial, financial and

entrepreneurial skills; and Insufficient and ineffective use of labor-based construction

and maintenance technology.


2. Domestic Construction Industry2. Domestic Construction Industry2.3. Challenges of Domestic Construction Industry Some of the major challenges faced in the Ethiopian

construction industry are: Lack of equipment and material; Obstacles posed by government regulations; Scarcity of finance; Big projects off-limits to domestic firms; Inefficient custom and clearance; Lack of skilled labor; and Construction project delays:- Delays are endemic to

construction projects in Ethiopia.


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.1 Road Construction The Road Sector Development Plan (RSDP) has been

implemented over a period of thirteen years and in three separate phases, as follows:

RSDP I – Period from July 1997 to June 2002 (5 year plan); RSDP II – Period July 2002 to June 2007 (5 year plan); and RSDP III – Period July 2007 to June 2010 (3 year plan).


Phases of the Program Financial (in Million ETB)

% Physical ( in km) %

Budget Disb. Plan Acco.RSDP I (Five Years ) 9812.9 7284.57284.5 74 8908 87098709 98RSDP II (Five Years) 15985.8 18112.818112.8 113 8486 1200612006 142RSDP III (Three Years) 34643.9 34957.834957.8 101 20686 1925019250 93Total RSDP (Thirteen Years ) 60442.6 60355.160355.1 100 38080 3996539965 105

2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.1 Road Construction RSDP IV is prepared as part of Governments’ overall

Growth and Transformation Plan. Implementation of RSDP IV is major strategic pillar of the

Growth and Transformation Plan. RSDP IV consists of: Rehabilitation of 728Km of trunk roads; Upgrading of 5,023Km of trunk and link roads; Construction of 4,331Km of new link roads; Heavy maintenance of 4,700Km of paved and gravel roads; and Routine maintenance of 84,649Km of road network.


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.1 Road Construction The program also consists of the following regional and

Wereda road components through Universal Road Access Program, URAP.

Construction of 11,212Km of new rural roads through the RRAs; and

Construction of 71,523Km of Wereda roads through the Wereda road offices.

Cost Estimate: The total cost of implementing RSDP IV is estimated to

be ETB 125,276.7 million.


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.2 Railway Construction Ethiopian Railway Corporation, ERC is presently

managing a 5,000Km proposed National Railway Network study and the Addis Ababa Light Rail Transit (AALRT) Project.

A. Addis Ababa Light Rail transit Project (AA LRT): The 1st Phase of the LRT project comprises an East-West

line from Ayat to Torhailoch (17.35Km) and a North-South line from Menelik II Sq. to Kality (16.90 Km).

The Total Length of Phase I will be 34.25Km. Cost: USD 3 milion per Kilometre.


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.2 Railway ConstructionA. Addis Ababa Light Rail transit Project (AA LRT):


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.2 Railway ConstructionB. Federal Railway Projects Ethiopia has launched the construction of a 5,000Km

railway complex which aims to link the capital, Addis Ababa, to various regions of the country.

According to the GTP 2,000Km of the total will be constructed in the next five years.

The first phase of construction will be the construction of five railway tracks, which will create job opportunities for over 300,000 citizens nationwide, and will cost the nation an estimated 6 billion Birr (US$336 million) annually.


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.2 Railway ConstructionB. Federal Railway Projects


Project

Phase

Route Via Distance

(Km)

Phase I Route 1 Addis Ababa (Sebeta)_Mojo_Awash_Dire Dewa_ Djibouti 656

Part of Route 3 Addis Ababa(Sebeta)_Ejaji_Seka_Bedele 366

Part of Route 6 Weldia_Mile_Djibouti_Railway 256

Part of Route 5 Awash_Kombolcha_Mekele 556.2

Phase II Route 4 Ejaji_Nekemt_Asossa_Kurmuk 460

Route 2 Mojo_Shashemene_Konso_Woyito_ Konso_ Moyale 905

Route 7 Wereta_Azezo_Metema 244

Part of Route 5 Mekele_Shire 201.2

Part of Route 6 Fnoteselam_Bahirdar_Wereta_Weldia 461

Route 8 Adama_Indeto_Gasera 248

Extension Extension to Sudan Via Boma (not part of the project) 115

2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.2 Railway ConstructionB. Federal Railway Projects


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.3 Hydropower Development Ethiopia has a vast hydropower potential, which is

estimated to be about 45,000 MW. Even though Ethiopia considers itself the Powerhouse of

Africa, so far very little percentage (less than 5%) of the vast potential has been harnessed.

In 2009 less than 10% of Ethiopians had access to electricity and the country was plagued by power outages.


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.3 Hydropower Development


Name Installed Capacity

Commissioning

Basin Contractor Financing Cost

Fincha 134 MW 1973 Fincha (Blue Nile)Gilgel Gibe I 180 MW 2004 Omo river Salini (bid) World Bank $331mTekeze 300 MW 2009 Tekeze (Atbara) Sinohydro

Corporation (bid)Chinese $365m

Beles 460 MW 2010 Lake Tana (Blue Nile)

Salini (no bid) Ethiopian government

Gilgel Gibe II 420 MW 2010 Omo River (no dam, fed by GG I)

Salini (no bid) Italy and EIB Euro 370m

Gilgel Gibe III 1870 MW 2012-13 Omo river Salini (no bid) Italy Euro 1.55bn

Fincha Amerti Nesse (FAN)

100 MW 2013 Fincha (Blue nile) China (CGGC) Exim Bank of China

$276m

Halele Worabese

440 MW 2014 Omo river Sinohydro Corporation

FairFund? Euro 470m

Gilgel Gibe IV 2000 MW 2014 Tributary of the Omo River

Sinohydro Corporation

Chinese $1.9bn

Chemoga Yeda 278 MW 2013 tributary of the Blue Nile, near Debre Markos

Sinohydro Corporation

Chinese $555m

Genale Dawa III

256 MW Awarded in 2009

between Oromo and Somali state

Chineese (CGGC) Chinese $408m

2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.3 Hydropower DevelopmentPossible interconnection with neighboring countries


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.4 Wind Power Development EEPCo has decided to use wind power for the several

advantages that it posses: Being renewable; Being reliable and affordable; Being complementary to hydropower plants: rainy season

– low wind; dry season – high wind potential; and combining wind and hydro adds value to the hydro plant,

i.e. longer operation time, also at the end of dry season (water saving through wind).


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.4 Wind Power Development


S. No. Name of the project Electric power

generation capacity in

MW

Year of

completion

11 Ashengoda Wind Power ProjectAshengoda Wind Power Project 120 120 ((€210 million )€210 million ) 20122012

22 Adama Wind Power ProjectAdama Wind Power Project 51 (51 ($117 million)$117 million) 20112011

3 Adama II Wind Power Project 51 2013

4 Assela Wind Power Project 100 2013

5 Ayisha Wind Power Project 300 2012

66 Debre Birhan Wind Power ProjectDebre Birhan Wind Power Project 400400 20132013

7 Messobo Wind Power Project 42 2012

2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.4 Wind Power DevelopmentFour major search areas for wind power


2. Domestic Construction Industry2. Domestic Construction Industry2.4. Recent Trends and Future Prospects2.4.5 Irrigation Projects2.4.6 Housing development projects2.4.7 University Capacity Building Projects, UCBP2.4.8 Sugar Factory Projects2.4.9 Fertilizer Factory Projects


3. Fundamentals of Management3. Fundamentals of Management3.1. Management: Definition A means of achieving political, economic, and social

objectives. A means of integrating resources (materials, finance,

human resources, information, etc.,) in order to achieve organizational objectives efficiently and effectively.

A means of getting things done through people in order to achieve objectives.

A process of establishing vision, mission, values, objectives, goals, and strategies and communicating these, and guiding and empowering others to accomplish them.

A process of planning, organizing, directing and controlling of organizational activities in order to achieve objectives.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions

Management is a set of goal-directed, interrelated and interdependent activities, aimed at accomplishing organizational goals in an efficient and effective manner.

Generally, management functions encompass: planning, organizing, leading and controlling.


3. Fundamentals of Management3. Fundamentals of ManagementManagement Function inputs and outputs


Management sets direction

ResourcResourceses•HumanHuman

•FinancialFinancial•Raw MaterialsRaw Materials•TechnologicalTechnological•InformationInformation

Inputs

PerformancePerformance•Attain goalsAttain goals•ProductsProducts•ServicesServices•EfficiencyEfficiency•EffectivenessEffectiveness

Outputs

Planning

Controlling Organizing

Leading

3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions Planning: devising a systematic approach for attaining

the goals of the organization. Organizing: determining how activities and resources are

grouped and the composition of work groups and the way in which work and activities are to be coordinated.

Leading: guiding, leading and overseeing of employees to achieve organizational goals.

Controlling: establishing performance standards and comparing results and expectations to make appropriate changes.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions


PlanningPlanning OrganizingOrganizing

LeadingLeadingControllingControlling

ManagementManagementFunctionsFunctions

3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.1 Planning Management starts with planning. Without a plan

organizations will never succeed. If they do, it will have been by luck or chance and is not repeatable. Plan, will help us in:

What to accomplish (goals); When to accomplish the goals; What resources to use; Who should accomplish what; Where to accomplish; and What methods to use.

Assess all possible scenarios including the best and worst and what actions to take.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.2 Organizing Organizing refers to the process of designing jobs and

departments and determining authority relationships in organizations.

Organizing: Permits people to work together in order to achieve goals; Helps to achieve synergy; Avoid duplication of resources; Establish authority ; and And facilitate communication.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.2 Organizing Some issues in organizing include: Specialization (division of labor); Grouping jobs into departments and structuring

(functional, product, customer, geographic, matrix); Determining authority relationships (span of control,

chain of command); Delegation of authority; and Centralization and decentralization.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.3 Leading Influencing, inspiring and empowering employees to

work towards the leaders vision.

Leading involves: Building successful groups and teams in organizations; Motivating people; Communication; and Developing organizational change.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.4 Controlling The process of measuring performance, comparing it

with the objectives, and making any necessary adjustments.

The purpose of control include: Adapting to changes; Minimizing consequences of errors; Helping the organization cope with complexities; and Improving efficiency.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.4 Controlling

A. Control Purpose The control function, in turn, has four basic purposes.


3. Fundamentals of Management3. Fundamentals of Management3.2. Management Functions3.2.4 Controlling

B. Control Process


3. Fundamentals of Management3. Fundamentals of Management3.3. Levels of ManagementManager: Definition


The people looking beyond themselves and exercising formal authority over the activities and performance of other people in pursuit of organizational goals.

Someone whose primary responsibility is to carry out the management process.

Someone who plans and makes decisions, organizes, leads, and controls human, financial, physical, and information resources.

3. Fundamentals of Management3. Fundamentals of Management3.3. Levels of ManagementA. Top Managers The relatively small group of executives who manage the

organization’s overall goals, strategy, and operating policies.

B. Middle Managers Largest group of managers in organizations who are

primarily responsible for implementing the policies and plans of top managers. They supervise and coordinate the activities of lower-level managers.

C. First-Line Managers Managers who supervise and coordinate the activities of

operating employees.


3. Fundamentals of Management3. Fundamentals of Management3.3. Levels of Management


Mar

keting

Administra

tion

Other

Human re

source

s

Operatio

ns

Finance

Middle managers

Areas of Management

Levels of Management

First-line managers

Top managers

3. Fundamentals of Management3. Fundamentals of Management3.3. Levels of Management


Lower Level

Middle Level

Top Level

Make decision about the overall direction and performance of the

organization

Translate the over all direction and performance into specific

objectives and plans

Implement directions and plans through

production and delivery of services

3. Fundamentals of Management3. Fundamentals of Management3.4. Managerial skills Conceptual skills: the capacity to think in the abstract

and to see the organization as a complete unit and to integrate and give direction to its diverse activities so that objectives are achieved.

Interpersonal skills: the ability to communicate with, understand and motivate both individuals and groups.

Technical skills: skills necessary to accomplish or understand the specific kind of work being done in an organization.


3. Fundamentals of Management3. Fundamentals of Management3.4. Managerial skills


Management SkillsInterpersonal Skills

Communication , conflict resolution, leading

Conceptual Skills

Intellectual ability to process information and make accurate decision about the work, group, and the job

Technical Skills

Knowledge and ability to accomplish the specialized activities of the work groupTop Level Middle Level Lower Level

3. Fundamentals of Management3. Fundamentals of Management3.5. Construction Management The management of construction is an enterprise that

involves many people with diverse interests, talents and backgrounds. The owner, design professional and contractor comprise the primary triad of parties,

However, others such as subcontractors, material suppliers, bankers, insurance and bonding companies, attorneys and public agency officials, are vital elements of the project team whose interrelated roles must be coordinated to assure a successful project.


3. Fundamentals of Management3. Fundamentals of Management3.5. Construction Management The function of project management for construction

include: Specification of project objectives and plans including

delineation of scope, budgeting, scheduling, setting performance requirements, and selecting project participants.

Maximization of efficient resource utilization through procurement of labor, materials and equipment according to the prescribed schedule and plan.

Implementation of various operations through proper coordination and control of planning, design, estimating, contracting and construction in the entire process.

Development of effective communications and mechanisms for resolving conflicts among the various participants.


3. Fundamentals of Management3. Fundamentals of Management3.6. Organization ManagementA. Organization A consciously coordinated social unit, composed of two or

more people influencing each other that functions on a relatively continuous basis to achieve a common goal or set of goals.

It is a structured process in which people interact and influence each other in order to achieve objectives.

B. Components of Origination People, Influence , Goals or Purpose, Structure, and Technology.


3. Fundamentals of Management3. Fundamentals of Management3.6. Organization ManagementC. Organization Environment


ORGANIZATION

Near or Operating Environment

Customers

Clients

Competitors

Suppliers

Partners

Macro or Far Environment

Technological Factors

Social Factors

Political Factors

Economic Factors

3. Fundamentals of Management3. Fundamentals of Management3.7. Organizational Structure Organizational structures can fall into either mechanistic

or organic forms. Mechanistic organizations are rather rigid in that they

comprise distinctly delineated jobs, clearly defined hierarchical structure and are driven primarily by top-down command and control. Mechanistic organizations are tall structures, consisting of hierarchies with several layers of management levels.

Organic structures are is relatively flexible. They are structurally decentralized, empowering employees at all levels of the organization to take personal responsibility for the processes and activities in which they are engaged.


3. Fundamentals of Management3. Fundamentals of Management3.7. Organizational Structure Organizational design is creating an appropriate

organizational structure that will enable the organization to accomplish its goals.

The organization can choose from among functional, divisional or matrix designs, whichever is appropriate.

It is the process of arranging, allocating work authority and resources to achieve organization goals.

It involves: Identifying tasks to be performed; Allocating the tasks among members; and Integrating efforts to achieve its objectives.


3. Fundamentals of Management3. Fundamentals of Management3.7. Organizational StructureKey Concepts Span of Management Control: The number of

subordinates reporting directly to a given manger; Chain of Command: The plan that specifies who reports

to whom in an organization, such reporting lines are prominent features of organization chart;

Coordination: The integration of the activities of the separates parts of an organization to accomplish organizational goals; and

Downsizing: A version of organizational restructuring which results in decreasing the size of the organization and often results in a flatter organizational structure.


3. Fundamentals of Management3. Fundamentals of Management3.7. Organization Structure3.7.1. Functional Organization In a functional organization, tasks or jobs of similar

nature are grouped together and structured as a unit. Each unit is staffed by functional specialists.

Structuring the organization along the functional lines facilitates good coordination and makes supervision of the unit easy for managers as they only need to be familiar with a narrow set of skills.


General ManagerGeneral Manager

Marketing MgrMarketing Mgr.. Production Mgr.Production Mgr. Finance Mgr. HRM Mgr.HRM Mgr.

3. Fundamentals of Management3. Fundamentals of Management3.7. Organization Structure3.7.2. Divisional Organization Divisional structures are grouped according to workflow

and structures are made up of independent strategic organizational units.

The workflow can be broken into product lines, geographic regions, etc.


GM (Head Quarter) GM (Head Quarter) (A.A)(A.A)

DGM (Awasa)DGM (Awasa) DGM (Mekelle)DGM (Mekelle) DGM (Bahir DarDGM (Bahir Dar) DGM (Jimma)DGM (Jimma)

3. Fundamentals of Management3. Fundamentals of Management3.7. Organization Structure3.7.3. Matrix Organization In matrix organization, individuals are made responsible

both to their line manager and the project manager involved.

The matrix concept facilitates working on concurrent projects by creating a dual chain of command, the project (program, systems, or product) manager and the functional manager.

Matrix structures utilize functional and divisional chains of command simultaneously in the same part of the organization, commonly for one-of-a-kind projects.


3. Fundamentals of Management3. Fundamentals of Management3.7. Organization Structure3.7.3. Matrix Organization


FinanceFinanceGrpGrp

MarketingMarketingGrpGrp

MaterialsMaterialsGrpGrp

HRHRGrpGrp

HRHRGrpGrp

ProductionProductionGrpGrp

FinanceFinanceGrpGrp

MaterialsMaterialsGrpGrp

ProductionProductionGrpGrp

MarketingMarketingGrpGrpProject AProject A

ManagerManager

Project BProject BManagerManager

ProductionProduction FinanceFinance MarketingMarketingMaterialMaterial&&ProcurementProcurement

HumanHumanResourceResource

Head QuarterHead Quarter

THANK YOU!
