Management Principles and Application for Construction and the Built Environment Name

Running head: MANAGEMENT PRINCIPLES IN CONSTRUCTION
Management Principles and Application for Construction and the
Built Environment
Name
Institutional Affiliation

MANAGEMENT PRINCIPLES IN CONSTRUCTION 2
Introduction
The construction and building sector in Hong Kong has been a significant engine behind
the rapid urban development of most cities. The construction industry contributes approximately
7 percent of the country’s GDP serving as the main pillar of both economic and social
development (Ashworth and Perera, 2018). This kind of industry is driven the massive housing
programs and infrastructure growth. However, the increasing labor demand coupled with an
aging workforce is one issue facing the construction industry in Hong Kong.
Over the years, outstanding structures have been completed to deliver affordable housing choices
for the residents in the world. With complex advances coming to play in accordance with green
development practices of sustainability, the construction industry has turned Architecture,
Engineering, and Construction (AEC) industry into an interesting innovation sphere (Carzo Jr
and Yanouzas, 2016). Over the last 20 years, the whole scope of elements in the construction
industry environment has steadily changed in such a way that the collected effect has made the
construction company move from their conventional task modes to a business method of activity.
This paper seeks to elaborate and discuss on the management principles and processes,
human resource influence on employees performance, activities and structure, organizational
structure and Scale and size influence of contracts in the construction and built environment. The
paper will further discuss on planning use in construction management, management of
procurement control and scheduling and further explain on how quality and risk management
will be administered. Finally, the type of procurement methods will be discussed and the impact
of procurement techniques on the construction firms.

MANAGEMENT PRINCIPLES IN CONSTRUCTION 3
Task 1 Answer
Management principles and processes used in the construction and build environment
sector
The construction and the built environment sector is currently one of the most lucrative
businesses in the world. The demand for infrastructural growth for economic development is the
main reason behind the growth of the construction industry. According to Slack and Brandon-
Jones (2018). , trends and practices related to the construction and built environment sector
management slightly vary from other industries. The main reason for this difference is that the
construction industry involves a higher amount of human deployment and financial capital as
compared to other industries. With regard to these reasons, the paper seeks to provide some
theoretical management skills needed in the construction and built sector. Essentially,
management performs four fundamental functions. The functions of management involve
organizing, controlling, leading and planning. Management is very important to numerous
organizations that need to achieve their aim. It is vital for success in the future or present.
However, there are various processes and principles of management that ought to be
implemented for effective management especially in the build and construction environment
sector (Domberger, Meadowcroft, and Thompson, 2016).
One of the management principles required for efficient management is the division of
work and discipline. It is significant to maintain discipline in an organization to successfully
carry out activities that sustain its organizational culture. Besides, the employees ought to be
divided into different segments according to their area of specialization. The division of work
principle increases employees’ productivity and operations effectiveness (VomBrocke et al.,
2014). Another principle required in management is the authority and unity of command. In this

MANAGEMENT PRINCIPLES IN CONSTRUCTION 4
principle, managers should have the authority for issuing orders as well as comprehend the
significance of his or her roles and responsibilities. In connection with authority, the unity of
command is required for proper management of construction projects (Keegan and Turner,
2012). Scheduling is another principle of management that enables the construction and building
activities to be conducted in an effective manner. Each and every activity must be scheduled in
order to meet the pre-determined timeline (Gong and Janssen, 2012). Therefore, the manager is
required to control the situation for administering the schedule of the activities.
Apart from scheduling, remuneration is also a management principle. In this regard,
employees’ satisfaction depends on an effective remuneration system. Therefore, the manager
ought to make sure that his or her employees are remunerated effectively to achieve optimal
satisfaction of his or her employees. Order and equity is another principle that is needed in an
organization. The principal brings order to the organization. In construction projects, workers are
always exposed to different forms of health hazard and risks (Gong and Janssen, 2012). It is,
therefore, significant to administer such activities in the construction projects and take suitable
precautions in handling these risky activities.
More so, preventive and corrective measures should be provided to maintain equity
needs in the construction sector. This simply implies that each and every employee ought to
receive similar opportunities and treated fairly and equally with regard to discipline (Gorse and
Emmitt, 2009). The principle of unity of direction ensures that employees are working toward a
shared goal or objective in a harmonious manner utilizing the same procedure or method. The
employees also subordinate their individual interests to the collective interests of the
organization (Armistead, 2016). The interests of the entire organization take precedence over
individual interests. Finally, management also involves centralization and scalar chain principles.

MANAGEMENT PRINCIPLES IN CONSTRUCTION 5
Centralization principle basically relates to decisions making, whether decisions can be made
from the top down, in a democratic way or from the bottom up. On the other hand, the scalar
chain principle is associated with a clear chain of communication that exists between superiors
and employees (Harris and McCaffer, 2013). The chain of communication should be respected
except the time speedy communication is needed.
Apart from principles of management, there are various processes that are used in the
construction and built environment sector. One of the processes used in the construction and
built environment sector is forecasting. Forecasting is an effective practice utilized as a starting
point for management decision making and planning. Delphi technique, correlation, input-output
analysis, trend examination, exponential smoothing, and regression analysis are a common type
of forecasting used (Harris and McCaffer, 2013). Planning is another important process in
management. It is an effective way that enables managers to stay focused and achieve the
specific goals of the organization they represent. Another process of management is organizing.
Organizing is useful in the establishment of both material and human structure (Gosling et al.,
2015). Additionally, motivation is the process that inspires and encourages employees to conduct
their jobs or tasks to be finished at the required timeline. It also maintains employees’
momentum. Finally, controlling is another process that ensures that everything happens in
accordance with the formed rule as well as expressed command.
Task 1.2
The Human Resource Management Influence on the Performance of Employees
The HRM department is a section within the organization that maximizes employees’
performance. In most organizations, the HRM is implemented to gain strategic organization’s
objectives. The main roles of the human resource management include employees’ recruitment,

MANAGEMENT PRINCIPLES IN CONSTRUCTION 6
training and development provisions, performance appraisal and rewarding of employees
(Hughes, Champion, and Murdoch, 2015). The practices and principles of human resource
management can positively affect the performance of both teams and individuals within the
organization. Therefore, the human resource management department assists in evaluating
different practices and policies that increase individuals and teams’ performance within the
organization (Noe et al., 2017). The reward and incentive policies are one of the activities done
by human resource managers to increase the motivation of employees. Employees are motivated
if the reward of good performance is ensured by the organization in terms of certain benefits.
The role of the human resource department is crucial in the context of individuals and
teams employed in the construction industry. Since most construction projects take a long period
of time, there is a need to involve an intensive amount of human resources(Kaspi & Raviv,
2013). Through the motivation of human resource management, employees can be easily
procured, retained and motivated in the most suitable manner. In the construction and built
environment sector, human resource management acts as a bridge between workers and the top
management. In this case, the HRM ensures good communication during construction (Kinicki
and Kreitner, 2013). The HRM influence on communication gives solutions to various
contingent problems at the construction site. Alongside problem-solving, the HRM improves
management engagement within the construction project. Each task in the construction and build
environment should be managed effectively for high production. The jobs should be divided into
smaller parts and allocated to qualified employees to perform the job (Kaspi and Raviv, 2013).
The employers need to monitor the progress of their workers to ensure that they follow the
prescribed methods.
Task 2 Answer

MANAGEMENT PRINCIPLES IN CONSTRUCTION 7
Task 2.1: Activities and structures in the construction and built environment
The construction and the building sector is among the largest industry by size in the UK.
In the United Kingdom, the construction industry employs more than 3.45 million people.
Horvath (2014) indicate that the development of this sector is lucrative in terms of career
opportunity. Based on Horvath studies, the construction industry contributes to the largest
revenue in the United Kingdom. It accounts for almost 70 percent of revenue income in the
government of the UK. However, the 2008 recession contributed to the decline of construction
industry revenue from 8.9 percent to 6.7 percent (Keegan and Turner, 2012).
According to Gann (2013), the construction and the building sector is the largest industry
by size inside the United Kingdom. This industry holds almost 3.45 million peoples. The study
by Horvath (2014) reflected that the growth of this sector is very much lucrative in terms of
career opportunity. Table 1 showing orientation of the construction industry in the UK.
Sector and its specifications Services offered
Contracting offers 2.35 million job
opportunities and contribute 63 billion dollar
revenue
It offers services in specialized construction,
civil engineering and building construction
Manufacturers offer 0.31 million jobs and
contribute 13 billion dollar revenue
Manufacturers in the construction sector
produces construction materials and products
Services sector in construction offers 0.58
million jobs and contribute 14 million dollar
revenue.
It offers services for construction tool business,
construction material production and
construction tolls and material wholesaling.
Source (Horvath 2014)
The responsibilities of each sector are specific and distinguishable. The contracting sector
creates buildings, national infrastructures, and houses. The main function of the team members in

MANAGEMENT PRINCIPLES IN CONSTRUCTION 8
this sector is to establish and implement projects by accumulating resources from different
sectors (Kelly and Hay, 2013). The team members also have the responsibility to ensure the
quality of the construction. In some cases, the quality of construction has reduced as a result of
the negligence of team members or overall material quality compromise. This can affect the team
and the company in future times. Gann (2013) stipulates that construction quality relies on
material quality generated by the production sector. The team members working in material
production sector have the responsibility to maintain the quality of material as per the industry
specifications.
Within the construction industry, the service sector takes the second position in terms of
value. The supply, availability, and pricing of the products rely on the service sector. Traders in
the service sector have the optimal bargaining power to supply, avail as well as price the
products (Kenley and Seppänen, 2016). Therefore, team members working in this sector have the
role and responsibility to maintain equilibrium with supply, demand, and price. The main reason
for maintaining equilibrium in demand, supply and price are that the whole developments in
infrastructure depend upon the service of this industry. Any unethical practices carried out by the
construction industry will negatively affect the national economy (Kinicki and Kreitner, 2013).
Individuals in this sector should conduct their business by keeping both company and national
interest at stake.
In the construction industry, there are various roles that are given to team members. Some
of the team members with roles include architect, surveyors, engineer and project manager. The
surveyor determines the location, features, size, and topography of the land. After the
information of the land is done by surveyors, effective planning is carried out. Another role
given to team members is the architect role (Atkinson, 2016). The architect formulates and

MANAGEMENT PRINCIPLES IN CONSTRUCTION 9
assists clients in understanding the requirements of the project. The architect also visualizes the
clients’ requirement and helps them realize the same visualization. The architect advises the
client on contract awards supervises progress and further respond to contractors technical
questions (Ashworth and Perera, 2018). However, the roles of the architects are not only limited
to technical activities but also on certain aspects such as business strategy, consulting and
leadership.
The project manager is another important team member in the construction industry. In
this case, the project manager is responsible for carrying daily inspection of materials and
employees of the whole project. Project managers also control the project to be completed on
time, manages the schedule of the project and maintains project quality by ensuring that the
project complies with the design. The engineer is also part of the team members. The engineer is
the most crucial person in the construction project and has the responsibility of designing the
project. Engineers conduct different calculation and analysis in electrical, mechanical,
geotechnical as well as the structural department (Carzo Jr and Yanouzas, 2016). After doing
analysis and calculations, they produce schedules, specifications, and drawing of the construction
industry. During construction, the civil engineer monitors work to ensure that standards are being
achieved.
Task 2.2 Answer: Organizational approaches and structure evaluation
Most companies’ core values are concentrated within delivering quality, maintaining
health and safety, customer satisfaction and environmental protection. The main focus of most
construction companies is to deliver quality and environmentally friendly growth through
maintaining safety measures of their workers. More specifically, the construction company
concentrates on the construction life cycle (Domberger, Meadowcroft, and Thompson, 2016).

MANAGEMENT PRINCIPLES IN CONSTRUCTION 10
Notably, the main construction aspect is maintaining as well as building. If any of the two
aspects is ignored, the building life cycle will be compromised (Walczak, 2015). In this scenario,
the main strategy that the construction company can employ is to develop projects using the life
cycle approach.
Alongside the first aspect, the other strategy of the company is based on expanding
business through increasing the loyalty of customers. The customer loyalty strategy conveys the
buildable and feasible solution to the clients (Cunningham, 2017). The customer loyalty strategy
enables the company to gain the confidence of its customer. There are various structures and
approaches that can be used to facilitate management in organizations. Flat organizational
structure is one of the structures used.
Flat organizational structure
A flat organizational structure has fewer layers as compared to other organizational
structures. The span of control from the top to the bottom in this type of structure is relatively
short. This type of structure is commonly seen in smaller organizations where there is immense
communication between managers and workers (Gong and Janssen, 2012). The decision-making
process in this structure is easier because the structure involves less bureaucracy. In flat
organizations, the number of individuals supervised by each manager is large but the number of
individual in the chain of command is small. The manager in this kind of structure has more
responsibility as compared to a manager in a tall or matrix structure (XU and LIU, 2013). This is
because there is a large number of a person immediately below who rely on the manager for
assistance, direction, and support. The managers in flat organization structure depend minimally
on the direction from the superior because there is a limited number of a superior.

MANAGEMENT PRINCIPLES IN CONSTRUCTION 11
Flat organization structure lowers operational costs because decisions are made at the
staff level. The employees are given significant authority with little to no supervision. In addition
to lower operational costs, flat organizational structure improves communication (Carzo and
Yanouzas, 2016). The executives and staff members in the flat structure are able to communicate
directly with one another without going through intermediaries. This structure not only speeds up
communication but also makes clear and understandable. Another benefit of the flat structure is
motivating and satisfying employees (Gorse and Emmitt, 2009). The employees in this structure
have the ability and authority to implement their ideas as long as they generate the desired
results. Empowerment of employees not only increases their productivity but also boost staff
motivation. Most trusted employees are motivated to perform their best and utilize their talent
and skills in the service of the company.
Figure 1 showing flat organizational structure
Source: (Carzo and Yanouzas, 2015)
Matrix Management Structure
Matrix organizational structure is a combination of two or more organizational structure.
Matrix management involves managing people with numerous reporting lines. The matrix is also
utilized for cross-business groups. This type of management can be included in project
management as well. In this kind of management, the organization falls between functional and

MANAGEMENT PRINCIPLES IN CONSTRUCTION 12
pure matrix structure (Rusinko, 2010). One of the most significant advantages of using a matrix
organizational structure is that permits sharing of highly skilled resources between functional
units and projects. In this type of structure, communication is open which helps in the
distribution of knowledge in the organization with minimal barriers. The structure is important to
those employees who want to broaden their experience as well as skills (Harris and McCaffer,
2013). The structure puts these employees in an environment that promote learning and gives
them an opportunity to develop their professions (Rowlinson, 2011). Matrix organizational
structure enhances efficiencies and enables the team to remain loyal because the structure
provides a stable environment where job security is strengthened.
Figure 2 showing the structure of matrix organization
Source: (Rowlinson, 2011)
From figure 1 above, it is evident that the matrix organizational structure is a compartment of
workers’ roles and responsibility. The employees or workers in the matrix organizational
structure are accountable for each operation they perform and are answerable to the functional
managers (Hughes, Champion, and Murdoch, 2015). The matrix organizational structure works
in the same way as a functional organizational structure.
Functional organizational structure

MANAGEMENT PRINCIPLES IN CONSTRUCTION 13
It is a structure that is used to organize workers. Workers are categorized based on their
particular knowledge and skill. Functional organizational structure vertically structures each
department with different roles from top management to low workers. It contains specialized
units that report to the top management (Kaspi and Raviv, 2013). Employees within each
functional department communicate with each other. After that, department heads proceed to
communicate with each other. This type of structure works in a stable environment that has
progressive operations. The goal of this structure is to put together every informational and
human resource necessary in a single place (Shirazi, Langford and Rowlinson, 2014). When
employees with similar skills and experiences work together, production becomes efficient and
of a higher quality. The structure also makes employees feel confident about what they do. They
become loyal to their department and the entire organization. These practices boost morale and
employees’ work ethic. Therefore, a functional organizational structure provides a perfect
environment for learning for new employees particularly new college graduate to be initiated
into real-world application of theoretical information (Keegan and Turner, 2012). Functional
organizational structure is better suited in large firms especially those that produce few goods
and services.
Most construction projects are administered using the project matrix structure. In this
structure, every single project is maintained by one project manager with his or her subordinates
and the administration and other close departments follow the structure of division. The
divisional structure permits the working method and policies flexibility in line with the dynamics
of the environment (Kelly and Hay, 2013). This is the reason that makes it suitable for
administrative and adjacent departments. The higher control and quality maintenance required in
the construction industry is the main reason why the project matrix structure is utilized in the

MANAGEMENT PRINCIPLES IN CONSTRUCTION 14
construction division. The project management structure permits more operations control in the
construction project than any other structure. The life cycle strategy in combination with the
scientific division of work has enabled the construction company to increase profitability by 10.7
percent (Noe et al., 2017). For instance, Stepnell follows line communication connection within
their company that enables a good flow of communication and policies uniformity.
Task 2.3 Answer: Scale and size influence of contracts on the business
In most cases, the scale and size of contracts greatly influence the construction business
sector in many ways. In this regard, the type and location of the contract, the size, and
complexities of the project influence the business in the construction sector. The size of the
contract creates a strategy for project implementation. Therefore, if a company has a high-value
project, it will be forced to apply more control as compared to the low-value project (Kelly and
Hay, 2013). This simply implies that when high-value projects get delayed or experience the
unfavorable condition, the higher financial impact will be experienced by the company.
However, the company terms and conditions rely on the type of contracts established by both
parties and liability sharing condition.
The construction and build environment sector has three main types of contracts. These
types of contracts include fixed contracts, time and material contracts as well as cost-plus
contracts. The fixed contract is the most followed type of contract by the construction
companies. The fixed contact is formed through the agreed estimated cost with a particular
provision for the cost increase in some special situations (Kenley and Seppänen, 2016). This type
of contract is beneficial for the construction companies because it provides the profit of early
termination through appropriate scheduling. On the other hand, the cost-plus contract has a

MANAGEMENT PRINCIPLES IN CONSTRUCTION 15
flexible cost that accumulates values via invoice production from the actual site. However, the
invoices used in the cost-plus contract ought to have a comprehensive value breakout. Failure to
have a comprehensive value breakout may delay the payment schedule. In a cost-plus contract,
the client may incur higher expenditure due to the variation of project cost (Ryall and Sampson,
2013).
Apart from the cost-plus contract, time and material contract is also an important type of
contract. This contract is a win-win situation for both the contractor and the client but the
projected slope is not definite. The contract is formed through agreed hourly or daily rate via a
comprehensive explanation of direct cost, mark-up cost, indirect cost, and overhead cost (Kinicki
and Kreitner, 2013). The two parties are responsible to maintain project slope and expense clarity
so that the project does not exceed the approximated cost by far. If this is left to occur, the client
financial profitability will be compromised.
Task 3 Answers
Task 3.1: Planning In the Management of Construction Process
Planning is one of the vital steps in construction management process. It is the orderly
proposal on how the end product of construction will be accomplished. There are so many
different experts that should be involved in the construction process to ensure that each phase of
construction is included in the planning process. Planning in the construction process involves
determining the required resources for the project. The construction process does not only focus
on financial planning but also on materials, human resource, suppliers as well as time. With
regard to planning in the construction management process, scope of the project, project
objective and work schedule should be addressed. The construction process management is
planned in various ways. Strategic planning is one of the processes used for construction

MANAGEMENT PRINCIPLES IN CONSTRUCTION 16
management. In this kind of process, the corporate planners decide on what project to be built as
well as the completion date to meet the project goals of the owner. The team working on the
construction project establishes the master construction implementation plan within the confines
of the stipulated guidelines in strategic and contracting plans. The other construction process
management is cost oriented or operational planning (Birrell, 2015). The main goal of the cost-
oriented planning in the construction sector is to reduce the slope as well as maximize project
utility. In a construction project, the project begins with the issue of designing. After the design
is done, the main project will start.
However, most construction projects follow schedule oriented planning (Wang et al.
2014). In schedule oriented planning, the critical path is followed because of avails practical
project implementation views. Managing a project planning through critical path method is vital
because it enhances the entire project time-cost proportion (Kaspi and Raviv, 2013). Planning is
significant in the construction project because it reduces resources collision and allows efficient
management of the project. Planning also maintains the cost of the project and further decreases
losses that may arise because of resources loss or application collision of resources (Keegan and
Turner, 2012).
Construction
Planning
Strategic
planning
Cost-
oriented Indirect
cost
Direct cost

MANAGEMENT PRINCIPLES IN CONSTRUCTION 17
Source: (Keegan and Turner, 2012)
Task 3.2: The Management of Procurement Scheduling and Control
Procurement scheduling and control of construction projects is challenging because of
imprecise estimation of activity lead times and durations. Procurement schedule is actually the
process of deciding what to purchase, when and from which source. It is an important aspect of
construction because it permits planners to determine whether expectations of the project are
realistic; especially those expectations of requesting entities. Procurement scheduling and control
is managed by use of different processes such as planning, selection and administration processes
(Keegan and Turner, 2012). Planning process involves development of formal procurement plan
which determines which item can be internally procured or externally outsourced. The selection
process is one of the aspects that is used in managing procurement scheduling and control. This
process involves comparing and differentiating both the advantages and disadvantages of
vendors as well as offering contracts.
After procurement contracts are decided and awarded to several managers, resource
calendars are developed that elaborate when, where and how resources will be used (Stevenson,
Hojati and Cao, 2017). Procurement scheduling and control is also managed through the
administration process which is comprised of tools and processes that are utilized to administer
Schedule-
oriented
Time-oriented through
critical path
Resource oriented-schop
schedule

MANAGEMENT PRINCIPLES IN CONSTRUCTION 18
the relationships between vendors. The administration process monitors, evaluate and determine
whether significant changes are required. It is one of the most important processes that is used to
manage procurement scheduling and control (Harris and McCaffer, 2013). Procurement
scheduling and controlling management of a project are vital because it produces profit and
maintains quality maintenance aspect. Any delay experienced in the procurement timeline affects
project profitability. The notable procurement control and the schedule is reflected in the
material purchase. The higher cost involved in procurement scheduling and control is the main
reason why the section is expensive
Likewise, labor and other tools depend upon raw material supply by other parties. For
instance, the company of Stepnell has developed separate contracts through subcontracts with the
procurement parties. The procurement list is formed by assessing project requirement and listed
agencies capacity. This kind of mapping assists the company to locate the right person that can
develop the procurement subcontract for a specific project. More so, mapping maintains control
over workflow and cost (Kenley and Seppänen, 2016). In this regard, the control of the project is
conducted through project periodic measurement in line with the planned flow. If a gap develops
within the workflow, a systematic cause-effect analysis is conducted to identify the impact on the
whole workflow. If another process impact develops through this assessment, faster control
should be applied to reduce the impact.
Task 3.3: The Management of Quality Control and Risk Management
In the most construction project, quality control is carried out using a thorough execution
of total quality management method (TQM) or any statistical method. In this case, the statistical
method is utilized to assess construction quality. The foundation and construction quality is
currently done using X-Ray testing (Lee, Park and Shin, 2009). The X-Ray results are interpreted

MANAGEMENT PRINCIPLES IN CONSTRUCTION 19
in line with the intended quality to examine construction quality. Besides, the total quality
management judges the overall quality of the project. The execution of the TQM is conducted by
establishing the benchmarks of the project.
After fixing the quality, periodic testing is done to identify any issues that are connected
to the project development as well as the implementation quality of the project (Raz and
Michael, 2011). On the other hand, risk management is carried out through executing the
measurement of health and safety of workers in the project. The control of risk is facilitated by
providing small medical units for treating in case of unsuitable circumstances that may come up
during the lifecycle of the project. Risk control is also ensured by availing sufficient safety
materials to the workers (Hughes, Champion, and Murdoch, 2015).
Task 4 Answers
Task 4.1: Evaluation of Procurement Methods Used In the Construction and Built
Environment:
Procurement is a general term in the administrative structure or explicit administration
practices that are utilized in projects such as roads, office building, and development of complex
shopping buildings. Previously, customers charged architects when they required their task built.
The planner was commanded to get ready applicable illustrations for the proposed plan (Keegan
and Turner, 2012). It is noticed that new acquirement strategies will be made to meet the new
needs and request from experts, customers, and contractors in the construction. The acquirement
strategy determination is critical to the development venture achievement. As per Hughes (2015),
the targets and need of the customer should be calculated in the determination of the suitable
procurement strategy and the customer's clarity on this will aid the decision of the procurement
choice.

MANAGEMENT PRINCIPLES IN CONSTRUCTION 20
There are different activities that should be done to create final results in the construction
and built environment sector. The procurement strategies in the development area include a
progression of considered dangers but the techniques have some specific points of interest just as
weaknesses. It is critical to ascertain both the advantages and expenses and utilize reasonable
strategies to do the work (Safa et al., 2015). There are different procurement routes that are
available in the company. Therefore, it is the responsibility of the organization to choose any
procurement method and use it in procuring. The methods of procurement are grouped in
numerous ways. These groups were categorized based on the risk taken by each party, the way
construction is ordered and maintained and lastly the available information at the time of
distributing the contract (Kelly and Hay, 2013).
The selection of the best procurement strategy additionally adds to in general customer
fulfillment. In any case, the selection of the proper procurement strategy relies upon various
factors, for example, time, the quality and cost which is extensively considered as the most basic
criteria for customers who need good result, at the briefest time and at a diminished expense (Jin
Lin et al. 2014). Then again, the chose acquirement technique may depend on various factors, for
example, innovation accessibility, accessible work, coordination, geography, and climate. A
proper procurement strategy is crucial for the customer (Ashworth and Perera, 2018).
Understanding the hazard is additionally critical on the grounds that every procurement
technique pursues the diverse arrangement of guidelines and systems to pick the distinctive
explicit strategy.
Traditional contracting
There are three fundamental kinds of contracting technique. They include conventional
contracting, management contracting and design and build. The traditional technique has been

MANAGEMENT PRINCIPLES IN CONSTRUCTION 21
the most widely recognized picked procurement route. As indicated by Fleming (2003), the
conventional strategy is where the structure and the development components are isolated. This
technique empowers the customer to select his or her master advisors to counsel on the different
part of the plan from an expert specialist to work with apart from the contract director (Ashworth
and Perera, 2018). After the plan has been finished, the task continues to tendering. The
technique enables the customer to control all parts of the structure through their designated
specialists, in contrast to another procurement strategy. In the traditional technique, the total task
configuration ought to be set up before continuing to tendering. This makes the technique to be
slower as compared with different strategies which are viewed by certain people as an
impediment (Hughes, 2015). For this situation, the quality, as well as configuration, will be seen
and allows for any change before continuing to tendering to ascertain that the customer is glad
and happy with the procedure.
Afterward, the expenses are set at the inclination of customers and the dangers included
are adjusted and seen as an advantage to the customer. The conventional procurement strategy is
one of the techniques that is related with fewer risks in light of the fact that the cost, time and
structure of the task are arranged toward the start (Domberger, Meadowcroft, and Thompson,
2016). The task can effectively run because the structure to the planning stage is not rushed
which can cause negative impacts on expense and time. As to quality, the traditional
procurement strategy can convey a construction venture of the most astounding quality as
compared to other strategies. This is on the grounds that the customer can analyze the specialist
structure and choose an appropriate plan depending on his financial plan and project
management (Ruparathna and Hewage, 2013).

MANAGEMENT PRINCIPLES IN CONSTRUCTION 22
The strategy gives the customer adequate time to check, make the plan, determinations as
well as illustrations to build up a superior tender record. There are various merits that are related
to the traditional procurement technique. The technique empowers the customer to control the
structure or specialist group, acquire the best cost through the aggressive tendering, better control
of work quality and the customer can control any work varieties (Gong and Janssen, 2012). More
so, the techniques ensure the enthusiasm of the customer through the specialists who give
counsel as well as autonomous certifiers in the structured contract. As much as the conventional
strategy presents numerous favorable circumstances to the customer, there are a few bad marks
that radiate from the technique.
Design and Build
In the Design and Build procurement strategy, the contractor's duty is to structure and
develop the plan. The administration of the contractual worker will run from task brief
preparation through sketch to the final illustrations with endorsements from pertinent specialists,
financing of the venture, outfitting, charging all things considered and kinds of hardware to
conclusive undertaking handover (Gorse and Emmitt, 2009). The Design and Build procurement
method contains contract records, for example, the prerequisite of employers, contract condition,
rates schedule and contractual worker recommendations. As indicated by Hughes et al. (2015),
the temporary worker is in charge of the hazard that radiates from the task which limits the
expense. Cinch et al (2012) affirm that the information, as well as the experience of contractual
workers, will be restricted depending on the temporary worker and the project type.
The customer will likewise not be legitimately included over the contract execution and
this implies varieties will be troublesome and expensive after the project has been finished. Build
and Design is a speedier method for structuring and building because both plan and development

MANAGEMENT PRINCIPLES IN CONSTRUCTION 23
work in parallel (Oyegoke, 2009). The Design and Build is a well-known choice for the standard
structure where the learning of the contract is required. The expense of the Design and Build
acquisition technique do not shift at the tender stage but subject to variations in the case of
configuration changes. The strategy profits the tender cost as the last contract total.
The construction procedure in the Design and Build procurement technique is performed by one
gathering and this somewhat influences the construction venture quality dimensions (Harris and
McCaffer, 2013). It is appropriate for activities that need early culmination. The technique also
has a few points of interest. The procurement technique is reasonable for all customers including
both master and non-master. In addition, it is cost assurance as well as the most optimized plan
of attack. The utilization of incorporated procurement techniques will result in improved
correspondence in the structure and development between the customer and the contractor
(Morledge and Smith, 2013). Also, the method engages an organized contract promise to the
diagram and project plan. However, it is not reasonable for complex structures and challenges
will be experienced by customers in the planning of adequate and thorough brief. The bill of
quantities absence makes the estimation of varieties to be troublesome and minimizes the
customers' freedom to make changes in the task structure amid the post-contract period (Kaspi
and Raviv, 2013).
Management contracting
In the management contracting procurement technique, the customer selects a complete
group of specialists who work on the task plan. The customer will additionally name a free
director who projects and organizes exercises in the plan and construction procedure to
encourage coordinated effort (Gorse and Emmitt, 2009). The contractual worker can give a huge
contribution to the practical structure innovation process viewpoints. The administrator is

MANAGEMENT PRINCIPLES IN CONSTRUCTION 24
mandated to administer a few contractors but he or she is not part of the contract. The manager
marks the employer authority over the task plan (Masterman and Masterman, 2013). It is like the
Design and Builds procurement technique in that the plan and development are quicker but the
cost conviction is not given and is seen as an impediment to the customer.
The administration contractual worker deals with the development work for an expense
that contains a rate for the benefit and fixed overheads. The strategy is used in situations where
the proprietor has sufficient construction project involvement of the continuous advancement in
this course. It is reasonable for substantial projects but also in situations where specific sub-
contractual worker fail to convey or willing to go about as the fundamental contractor (Kaspi and
Raviv, 2013). One of the primary merits of contracting management is that the principal
contractor can manage other different contractors. It additionally limits the term and expenses of
tasks and encourages insight to the structure group. The bad mark that is related to developing
contracting management is the absence of responsibility because the agreements are issued
between the customer and the different contractual workers (Potts and Ankrah, 2008). It likewise
expands the expense of development that results from the extra administration costs.
Contractors in the construction sector can be chosen using various ways. They can be
chosen based on competition and negotiation. Open competition, negotiated contracts, and
selective competition are a common type of competition used by contractors. Selective
competition is the traditional method of awarding construction contracts. In this type of
competition, the project team chooses specific companies for tendering and the companies which
submit the lowest tender gets the project (Shen and Song, 2018). Another type of competition in
construction is negotiated contracts. Negotiated contracts are the most common used
procurement method by organizations. It happens when there is no challenge and when the cost

MANAGEMENT PRINCIPLES IN CONSTRUCTION 25
of the tender is to be concurred by the sole contractor. The valuation of the report is looked into
by the customers' surveyor and in case of any case of disagreements, the parties involved
internally negotiate. However, the process of negotiation can add up to 5 percent cost of the
initial contract (Hansen, 2010). The contractor participates maximally in the project. Finally,
open challenge is additionally a procedure utilized for tendering where the required criteria are
publicized in the trade exchange production. The competition always limits the number of
chosen firms to 6 but the price submitted by any number of companies in case of open tendering.
After consultation is done, an appropriate contractor is chosen. Apart from pricing, other factors
are also considered in open tendering (Kenley and Seppänen, 2016).
Furthermore, the construction and built environment sector also involve several measures
of tendering. One of the measures used in tendering is a public-private partnership. The PPP is
simply the relationship between public and private sector. In this case, the private sector and the
government should agree on tasks and risks division for a construction project (Kinicki and
Kreitner, 2013). The public sector joins with the private sector as a result of limited funds to
undertake a particular project. The cost of the project is mainly borne by the users of the service
but not the taxpayers. In this case, the government provides grants in infrastructure projects as
well as taking into account several resultant risk factors (Domberger, Meadowcroft and
Thompson, 2016). The private sector avoids risky projects and most of them are done by the
government.
Another measure of tendering is partnering. In construction, partnering is the effort
between consulting engineer, architect, and client to avoid any type of dispute and further
upgrade correspondence among the related gatherings by sharing undertakings objectives and
targets. The amazements in joining forces can be expelled by the antagonistic connections and

MANAGEMENT PRINCIPLES IN CONSTRUCTION 26
trust that is worked among accomplices. Partnering can be of great benefits if used in the
construction industry appropriately (Anyanwu, 2013). The third measure of tendering is the
private finance initiative (PFI). PFI is a method of developing a public-private partnership. The
private capacities and public resources are utilized to deliver particular services outlined by the
public sector. Most activities done by PFI relate to public procurement. The PFI is a significant
enabler of the project or service purchaser. However, the risk in the PFI is transferred from one
sector to another.
Task 4.2: Contracts use in the Management of Construction Projects
Contracting is a vital piece of project ventures. Dealing with contracts, along these lines,
is similarly vital for the accomplishment of any business procedure because of the quick
increment in numerous contracts. Contract and associations are a basic part of the present fast,
multilateral business culture both in the public and private part. Contract management is turning
into an essential piece of the project management, and business by and large. Numerous business
and project administrators are increasingly facing contract management issues. Contract
management is the dynamic administration of the connection between the customer and
contractors over the term of the agreement for the provision of products and services to the
agreed principles. Contract management ought to be proportionate to the value, risk, and
multifaceted nature of the agreement. Fruitful contract management associations can expand
control, increase proficiency and lessen the cost and further provide vital and competitive
advantages. Great arrangement, the correct contract, single business center, and administration
conveyance management and contract organization factor are fundamental factors for good
contract management.

MANAGEMENT PRINCIPLES IN CONSTRUCTION 27
In terms of time, contracts play a significant role in organizing and executing a strategy
that is linked to the time needed to accomplish project activities. Contracts ensure that the
contractor manages time efficiently to meet the budget as well as program target on time (Carzo
Jr and Yanouzas, 2016). They reduce the risk of incurring unnecessary costs and delays that are
caused by ineffective time management that result from failing to effectively manage scheduled
work or unexpected events. Contracts ensures that all construction activities are planned to
maximize the allocation of resources and minimize time spend on unknowns. Contracts are
therefore important in setting the scope of the project as well as deadlines.
In terms of quality, contracts ensure that the contractor has a robust quality management
program for the success of the project. The contract in place ensures that the program developed
clarifies the standards and requirements, forms the means and methods for administering the
process, decreases misunderstandings and defines responsibilities and accountabilities (Van Roy,
Verstrynge and Van Balen, 2015). Contracts also facilitate and administer data collection,
determine performance irregularities and nonconforming work. With the use of contracts, the
working relationship between the design team and project owner will be improved. Contracts
systematically manage quality and improve the project delivery of the contractor and
productivity as well as minimizing wastes.
In terms of insurance, the contract ensures the human resource in the construction sector
is protected against risks that are associated with construction. The construction risks may result
to direct loss or damage that may include legal liabilities from design stage to handover
(Ashworth and Perera, 2018). The contracts arrange various parties in the construction sector to
cater for their own responsibilities to take an insurance to cover the works as well as the third
parties that are at risk. It is therefore important to consider using contracts to ensure that every

MANAGEMENT PRINCIPLES IN CONSTRUCTION 28
individual working in the construction sector is protected against any risk or damage that may
arise from the construction project.
In terms of costs, the contract is the most appropriate tool to use in projects that cannot be
effectively administered. Contracts are normally used to build only a design prepared under the
employer’s direction. In most cases, contracts are used in the construction projects to manage
costs. They use the updated working schedule to forecast the output costs of the work and the
value of work done (Murdoch and Hughes, 2012). With regard to costs, contracts can be used
with any method of pricing such a target costs, fixed fee, partnering and cost reimbursement.
Contracts are therefore crucial in regulating the costs of construction projects. With regard to
warranty arrangements, the contract ensures that each party meets its particular obligations as
proficiently as possible. It further safeguards the right of each party and ensures needed
performance when situations change (Ortiz, Castells and Sonnemann, 2009). It is important for
companies to use contracts because they are useful in ensuring that projects meet the specified
quality with given costs at a particular time while protecting its human resource at the same time.
Task 4.3: Impact of Procurement Technique on the Organization and Operations
The impact of procurement technique on the operation of the organization is immense.
Firstly, procurement helps organizations to understand business requirements such as buying of
products and services at the right price, from the right source, at the right specifications, in the
right quantity and delivered at the appropriate time. Secondly, the procurement techniques
manage the procurement process and supply base proficiently and effectively by identifying

MANAGEMENT PRINCIPLES IN CONSTRUCTION 29
opportunities and administering internal operations. There are various procurement techniques
that are performed by an organization. Some of the procurement processes are management
contracting, traditional, design and build, framework agreement as well as the public-private
partnership. The procurement techniques in each of this method differ greatly from each other to
a certain extent (Gardenal, 2013). Therefore, each technique impact can be observed in different
construction project aspects. The procurement technique impact is viewed in terms of
environmental issues, professional standards government initiative as well as multi-disciplinary.
The construction and built sector involves multi-disciplinary teams and procurement
technique impact is seen in these teams. In terms of input acquisition and hired contractors, the
teams can be reconstructed for implementing the operations (Gorse and Emmitt, 2009). The rules
and regulation provided by the government ought to be put into consideration when dealing with
public-private partnership (PPP). In the PPP, the government has some level of power that
exceeds private sector (Toktaş-Palut et al. 2014). In this case, the government relies on certain
procurement technique taken by any organization.
It is therefore important to put into consideration sustainability context because the
procurement procedure can add to ecological as well as sustainability management issues,
particularly in the construction venture. According to Yu et al. (2015), teamwork is vital in the
construction sector and reforms need to be done to ensure collaborative management in the
industry. Likewise, the benchmarking process is required to compare productivity, cost and cycle
time quality. The main aim of the construction industry is to promote sustainability in
construction projects(Gorse and Emmitt, 2009). The process of procurement can affect
construction performance and therefore, suitable strategies must be used to promote sustainable
construction.

MANAGEMENT PRINCIPLES IN CONSTRUCTION 30
Conclusion
The construction and the built environment sector is currently one of the most successful
and lucrative businesses in the world. It is therefore important to manage the construction
projects efficiently for more success in the future. Management principles such as order and
equity, scheduling, discipline, division of work, remuneration, authority, and unity of command
ought to be incorporated in the construction industry for efficient management. Alongside the
management principles, human resource management is also vital in maximizing employees’
performance. It is significant to initiate effective human resource management to motivate as
well as increase the performance of employees and teams.
The present activities of the construction industry are divided into contracting which
develop buildings and houses constructions, the service sector which comprises of supply,
products availability, and pricing and the production sector which produces and maintain the
quality of produced products. Additionally, surveyors, project manager, engineers, and architect
are important to team members in the construction industry. In most cases, companies
concentrate on delivering quality, maintaining employees’ health and safety, satisfying
customers and protecting the environment. The organizational structures commonly used in the
construction industry are flat, functional and matrix structure. Most construction project use
matrix organizational structure because higher control and quality maintenance are required.
Besides, the scale and size of contracts also play a vital role in developing a strategy for the
implementation of the project. Cost plus contracts, time and material contracts and fixed
contracts are the commonly used contracts in the construction industry. It is also important for

MANAGEMENT PRINCIPLES IN CONSTRUCTION 31
the construction sector to involve traditional, management contracting and design and build as
procurement methods.
With regard to planning, cost-oriented and schedule oriented planning are the common
forms of planning used by companies. Schedule oriented planning is commonly followed by
companies because it provides the actual implementation of the project. procurement booking
and controlling of the project management is critical in light of the fact that benefit generation
and part of value support depend on this stage. Any delay could affect project profitability. In
project planning, quality control and risk management are important in determining the desired
quality as well as implementing health and safety measures.
The construction business has begun to accept extraordinary significance as of late. There
are more signs that this pattern will advance. The competition for worldwide activities has turned
out to be extreme and the worldwide commercial center has overwhelmed because of the
advancement of mastery and capability of firms from various developing nations. The
developing firms would now be able to trade their services and contend adequately with other
built-up firms. For achievement in the construction projects, the organizations are required to
address factors, for example, specialized mastery, administrative ability, the board of social
issues and hazard the board.
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