1. In the name of Allah the Most Gracious the Most Merciful

2. 2 CE-301 Construction Engineering and Management Lecture - 2

3. Basic Terminology Project Subprojects Project Management Construction Management 3 Many definitions for these words have been proposed. Sample definitions are contained in the following slides.

4. Project Characteristics A Project…  Has specific objectives  Has a start and end date  Has a budget  Has an ‘owner’/’sponsor’  Produces specific deliverables  Can vary vastly in size, complexity and duration 4

5. What is a Project? (Definition #1) A project is a temporary endeavour undertaken to create a unique product, service, or result (Guide to the Project Management – Body of Knowledge, the Project Management Institute, 3 rd. Ed., 2004, p. 5)

6. What is a Project? (Definition #2) A project is a sequence of unique, complex and connected activities having one goal or purpose that must be completed by a specific time, within budget and according to specification. (Robert Wysocki / Robert Beck Jr. / Daniel B. Crane: Effective Project Management, John Wiley & Sons, 2002, p.65) 6

7. What are Subprojects? Subprojects are smaller, more manageable components of larger, more complex projects Subprojects have their own goals and outputs or deliverables which together constitute the final deliverable. Subprojects have, analogous to the main project, their own scope, schedules, costs, human resources, risks etc. 7

8. Subprojects Example: The Beijing Olympic Games 2008 Events Venues, Facilities Accommodation Venues, Facilities Accommodation Transport Media Facilities and Coordination Media Facilities and Coordination Telecommunications Security Arrangements Security Arrangements Medical Care Human Resources and Volunteers Human Resources and Volunteers Cultural Olympiad Pre-Games Training IT-Projects Opening and Closing Ceremonies Opening and Closing Ceremonies Public Relations Financing Test Games and Trial Events Test Games and Trial Events Sponsorship Management Sponsorship Management The Beijing Olympic Games 2008 was a highly complex project which comprised several distinct work areas, each of which could be con- sidered as subprojects, in their own right, and which all had to be in- tegrated and coordinated within the framework of the overall Olympic project.

9. (Harold Kerzner, Project Management: A Systems Approach to Planing, Scheduling and Controlling, John Wiley & Sons, Inc., New York et. al., 7. ed, 2001, p. 4) What is Project Management?

10. The Triple Constraint of Project Management

11. Advantages of Using Formal Project Management Better control of financial, physical, and human resources Improved customer relations Shorter development times Lower costs Higher quality and increased reliability Higher profit margins Improved productivity Better internal coordination Higher worker morale

12. Selection of the Project Manager Experience has shown that the selection of the project manager is a key appointment which can influence the success or failure of the project. As the single point of responsibility, it is the project manager who integrates and co- ordinates all the contributions, and guides them to successfully complete the project. 12

13. Selection of the Project Manager The following lists some desirable project manager attributes:  leadership ability  ability to anticipate problems  operational flexibility  ability to get things going  ability to negotiate and persuade 13

14. Selection of the Project Manager  understand the environment within which the project is being managed  ability to review, monitor and control  ability to manage within an environmental of constant change  ability to keep the client and consultant happy 14

15. Types of Organizational Structures  Types of Organizational Structures 1.Functional organizations The most prevalent organizational structure in the world today is the basic hierarchical structure (Figure 1). This is the standard pyramid with top management at the top of the chart and middle and lower management spreading out down the pyramid. The organization is usually broken down into different functional units, such as engineering, research, accounting, and administration. 15

16. Figure 1: Functional Organization 16

17. Functional Organization The strength of the functional organization is in its centralization of similar resources. For example, the engineering department provides a secure and comfortable organizational arrangement with well- defined career paths for a young engineer. 17

18. Functional Organization The functional organization also has a number of weaknesses. When it is involved in multiple projects, conflicts invariably arise over the relative priorities of these projects in the competition for resources. Also, the functional department based on a technical specialty often places more emphasis on its own specialty than on the goals of the project. Lack of motivation and inertia are other problems. However, many companies use the functional organization for their project work as well as their standard operations. 18

19. Project Organizations The opposite of the hierarchical, functional organization is the single-purpose project or vertical organization. In a projectized organization, all the resources necessary to attain a specific objective are separated from the regular functional structure and set up as a self-contained unit headed by a project manager. The project manager is given considerable authority over the project and may acquire resources from either inside or outside the overall organization. All personnel on the project are under the direct authority of the project manager for the duration of the project. 19

20. Figure 2: Project Organization 20

21. Project Organizations The advantages of the project organization come from the singleness of purpose and the unity of command. Motivation is developed in the working personals through this type of organizational structure. 21

22. Project Organizations The project organization, however, is not a perfect solution to all project management problems, as some have suggested. Setting up a new, highly visible temporary structure upsets the regular organization. Facilities are duplicated and resources are used inefficiently. Another serious problem is the question of job security upon termination of the temporary project. Personnel often lose their “home” in the functional structure while they are off working on a project. 22

23. Matrix organizations The matrix organization is a multidimensional structure that tries to maximize the strengths and minimize the weaknesses of both the project and the functional structures. 23

24. Figure 3: Matrix organization 24

25. Matrix organizations 25 The major benefits of the matrix organization are the balancing of objectives, the coordination across functional department lines, and the visibility of the project objectives through the project coordinator’s office. The major disadvantage is that the person in the middle is working for two bosses. Vertically, he or she reports to his functional department head. Horizontally, he or she reports to the project coordinator or project manager. In a conflict situation he or she can be caught in the middle.

26. Matrix organizations The project manager often feels that he has little authority with regard to the functional departments. On the other hand, the functional department head often feels that the project coordinator is interfering in his territory. The solution to this problem is to define the roles, responsibility, and authority of each of the actors clearly in a project charter. The project coordinator specifies what is to be done and the functional department is responsible for how it is done. 26