m Explore the range of perspectives on

organisation

m Identify those attributes which are

valuable in a project management
context
m uanagers depend on effective
organisations for achieving their
objectives

m ueeting the objectives through

organisation
m 2tems from first wave of writing on
management in early part of last century
and is characterised by the work of
Taylor and Foyol

m Was the foundation of management

practice up to about 1950
m Taylor laid the foundation of p




m The approach suggests that it is possible
to get maximum output by minimum
input if tasks are scientifically structured
m Fayol·s work was influential as lead other
scientists to develop principles of
management
m Pyramidal organisation structure
Outhority is delegated downwards
m This approach became a deterministic
approach and was known as the only
way to organise

m Fayol did not intend this, however the

user applied this view of organisation (still
is the case)
m The soundness and good working order of
the body corporate depends on a certain
number of conditions termed
indiscriminately principles, laws, rules. For
preference I shall adopt the term principles
whilst disassociating it from any suggestion
of rigidity, for there is nothing rigid or
absolute in management affairs, it is all a
question of proportion. 2eldom, do we have
to apply the same principle twice in
identical conditions; allowance must be
made for different changing circumstances
m xecognition of informal organisation in
parallel with formal organisations

m 2tudy of management should be

cantered on interpersonal relations or
should be seen as a social network
m ecause people cannot be treated as
machines

m People·s behavioural response to their

position within a formal organisation
cannot be expected to subscribe to the
predetermined manner in which they
are expected to perform
m ¦oal complexity within organisations leads to
disparity between the official goals of an
organisation and the goals actually pursued

m This then governs the behaviour of the

participants

m The existence of informal goals creates an

informal structure intended to achieve them

m The recognition of this phenomenon

challenged the classical approach to
organisations
m ased on the studies conducted by The
Tavistock Institute of Human xelations
(London) in 1950s and 1960s
m The business organisation is both social
and technical system
m The needs of both the technical and
social aspects should be served by
organisations
m 2cott (1992) notes that the goal should
be one of Ô
 



m It combines the conception of like
0 People without organisation (ennis 1959)
0 Organisation without people (ennis 1959)
m O way of thinking about complex
processes so that the interrelationships of
the parts and their influence upon the
effectiveness of the total process can be
better understood, analysed and
imroved
m On entity, conceptual or physical, which
consists of interdependent parts. Each of
a system·s elements is connected to
every other element, directly or
indirectly, and no sub-set of elements is
unrelated to any other sub-set
m Orchitect
m Engineer
m Quantity surveyor
m Contractors...
m It depends upon them perceiving the same
objectives for the project and recognising
that what each of them achieves depends
on what the others do

m With this view they should be able to stand

above the particular interests of their own
contribution and see the problem posed by
the project as a whole

m The advent of project manager has come

about as a result of the inability of the
contributors to achieve this
m Closed system
0 £oes not respond to events and occurrences outside
the system
0 It cannot adapt to changes
0 It is predictable
m Open system
0 Odapts to events and occurrences outside the
system
0 Permeable boundary
0 Import and export between open system & its
environment
0 £ynamic
0 Olways changing and evolving
m Which one is open system/closed system
0 Overloaded washing machine
0 Living organism
0 uotor car fuelled by dirty petrol
m Ñes
m O central heating system and the human
body
m They are systems that defend itself from
having to adapt fully to its environment
m Olso called ½
 
m Open system
m The system must adapt to the clients
demands
m It imports ideas, energy, materials,
information, etc from its environment
m It transforms the inputs into outputs
(finished construction)
m Output is exported to the environment
 The environment

Transformation
Ideas uildings
Information xoads
Input Construction Output Plant
Energy Process 2ystem
uaterials ridges
etc People and/or machines etc
m Identifying, communicating and adapting
the system·s objectives
m Ensuring that the parts of the system are
working effectively
m Ensuring that appropriate connections are
established between the parts
m Octivating the system so that the
connections that have been established
work effectively
m xelating the total system to its environment
and adapting the system as required in
response to changes in its environment
m Onticipating the chain reactions of
decisions and developments that occur
on the project
m Os a result of an upturn in the business,
the client may decide at a late stage in
the design of a project to be submitted
for competitive tender, that substantially
more floor area is needed in the factory.
What measures do you consider as a
project manager?
m Its effect on the project cost
m Completion time
m Functional efficiency
m Evaluated against alternatives
0 Providing the additional area in a different
form, e.g. Leased accommodation
0 Providing the additional area in a different
method, e.g. O negotiated contract for the
additional area
m xelationship between time and cost
m Interaction between all the contributors
etc
m 2ystem theory provides a platform so
that all other schools of management
join together within a framework with less
rigidity and more recognition of
interdependency in organisations
m Organisation is a function of the nature
of the task to be carried out and its
environment
m £ifferent environments create different
levels of uncertainty that requires the
separation between units of an
organisation (e.g. Orchitect, engineer,
contractor) and hence they require
different degrees of integration
m The extent of differentiation (separation)
depends;
0 ncertainty
0 £iversity of environment
0 The effect of environment diversity on the way
the task is managed or organised

m Contingency theory believes that

managers have to respond to the
environment of their organisations in
designing organisations

m uanagers are responsive to, and their

actions determined by, the environment
m Considers an open system approach similar to
contingency theory

m uanagers have choices and although the

environment may constrain their choices to
some extent it does not determine them

m xather than being a function of task and

environment, organisation structures are
determined by political contests within
organisations leading to a framework for the
power-driven political explanation of
organisational structure
m Orises from open system framework

m 2ees managers making strategic choices

within constraints to reduce their
dependencies which shows similarity with
strategic contingency approach

m uanagers do not have unbridled

strategic choice
m Concerned with the impact of institutions
(government, professional groups),
public opinion and pressure groups on
the structure of organisations
m ueyer and xowan (1977)
0 uany of the positions, policies, programs, and
procedures of modern organisations are
enforced by public opinion, by the views of
important constituents, by knowledge
legitimated through the educational system, by
social prestige, by the laws, and by the
definitions of negligence and prudence used by
the courts. 2uch elements of formal structure are
manifestations of powerful institutional rules
which function as highly rationalized myths that
are binding on particular organisations
m Open system
m Criticisms stem from its supposed
disregard of the informal organisation

m It assumes that people in organisations

behave predictably and calculatedly

m The idea of an organisation having a

goal or single objective
(oversimplification of the problem)
m uintzberg·s classification of the structure
of organisations has a strong appeal to
people in the construction industry
m He adopts an open system
m He incorporated the contingency theory
m He believes an effective organisation
achieves appropriate balance between
task, environment and organisation
structure
m He introduces 7 organisation
configurations
The political
organisation
The Entrepreneurial The £iversified
Organisation organisation

The machine The professional

organisation organisation

The missionary The innovative

organisation organisation
m 2imple organisations that are run by their
leader
m One person at the top retains so much
influence
m £ynamic system
m Ore able to outmanoeuvre the
bureaucracies
m Work is very formalized
m There are many routines and procedures
m £ecision-making is centralized
m Tasks are grouped by functional
departments
m Jobs will be clearly defined
m There will be a formal planning process
with budgets and audits
m Tight vertical structure
m Functional lines go all the way to the top,
allowing top managers to maintain
centralized control
m These organizations can be very efficient,
and they rely heavily on economies of
scale for their success
m The formalization leads to specialization
and, pretty soon, functional units can have
conflicting goals that can be inconsistent
with overall corporate objectives
m Large manufacturers are often machine
organizations
m ¦overnment agencies
m 2ervice firms that perform routine tasks
m If an organization has many different
product lines and business units, you'll
typically see a divisional structure in
place
m O central headquarters supports a
number of autonomous divisions that
make their own decisions, and have their
own unique structures
m Large and mature organizations that
have a variety of brands, produce a
wide range of products, or operate in
different geographical regions

m The key benefit of a divisional structure is

that it allows line mangers to maintain
more control and accountability than in
a machine structure
m £ivisions can tend to be in conflict,
because they each need to compete for
limited resources from headquarters

m Can be inflexible

m They work best in industries that are stable

and not too complex

m If your strategy includes product or market

diversification, this structure can work well,
particularly when the company is too large
for effective central decision-making
m In new industries, companies need to
innovate and function on an "ad hoc"
basis to survive

m With these organizations, bureaucracy,

complexity, and centralization are far
too limiting
m Filmmaking, consulting, and
pharmaceuticals are project-based
industries that often use this structure
m £ecisions are decentralized, and power
is delegated to wherever it's needed. This
can make these organizations very
difficult to control
m There can be lots of conflict when
authority and power are ambiguous
m ‰ery bureaucratic
m The key difference between these and
machine organizations is that
professional organizations rely on highly
trained professionals who demand
control of their own work
m While there's a high degree of
specialization, decision making is
decentralized
m The professional organization is complex,
and there are lots of rules and procedures
m Ñou can act as if you were self-employed
yet regularly receive a paycheck
m Enjoys the efficiency benefits of a machine
structure, even though the output is
generated by highly trained professionals
who have autonomy and considerable
power
m The clear disadvantage with the
professional structure is the lack of
control that senior executives can
exercise, because authority and power
are spread down through the hierarchy.
This can make these organizations hard
to change.
m It is common in places like schools and
universities, and in accounting and law
firms
m xich system of values and beliefs about
an organisation, shared by its members,
that distinguishes it from other
organisations
m Their tendency to be small facilitates
personal relationships
m the founding members frequently share
a set of strong basic beliefs, and the
founders of new organisations are often
charismatic individuals, energising and
knitting members together
m Co-exists with other type of organisations
m £eveloping an ideology in an existing
organisation is possible but much more
difficult
m The uissionary form may not be
appropriate for the large firm which has a
strong ideology
m Japanese corporations, with their lifetime
employment, consensual decision-making,
collective responsibility, slow evaluation
and promotion, implicit and informal
control, non-specialised career paths, and
holistic concern for the employee
m sually co-exists with more conventional
patterns but maybe strong enough to
stand alone
m Politics is the dominant system
m Political activities pitches individuals or
groups against the organisation·s systems
of influence, different systems against
each other
m The lack of any preferred form of order,
structure or coordination typifies the
political organisation
m He believes organisations rather than
being a perfect fit to his proposed
organisation structure can fit more or less
into one of his configurations
On integrating
pentagon of
forces and forms
m Client organisation could be any of the
uintzberg·s configuration
m £esign firm could be a 




 but may tend towards an

 




m Other professional consultancies could
have similar profiles but with engineers
and quantity surveyors more likely to be
more based towards a 





m Ot the construction stage of a
conventional project the contractor and
subcontractors will tend towards a





m The nature of construction is that
elements of both 

 and

 



 will probably be
necessary
m 2ome small subcontractors may be
mainly




 


m £epending on the contract strategy, the
construction firms may need to be more
strongly biased towards 

 and

 



  e.g. £esign-
and-build and build-operate-transfer
projects
m Project organisation which overlays and
comprises a range of firms each of which
has a structural orientation which suites
its particular contribution to the project
m Have a read through 
  

 
m Chaos and complexity theory
m The transaction cost approach and its
application to construction industry
m Critical theory
m postmodernism
m uuch of contemporary organisational
theory stems from systems theory,
contingency theory, resource
dependency theory, institutional theory
and the work of uintzberg

m Oll of these provide a basis for analysing

construction project organisations