Management Principles and Application for Construction Report

This report examines the application of management principles within the construction and built environment. It covers the evolution of management theories, including Maslow's hierarchy and McGregor's theories, and their relevance to human resource management. The report analyzes organizational structures, such as functional and project-based approaches, and evaluates the impact of contract size and complexity on business practices. It delves into project planning, procurement methods, scheduling, quality control, and risk management. Furthermore, the report explores various procurement methods and contract types, emphasizing their influence on construction firms and projects, offering valuable insights for students studying construction management.

Management principals and application for construction and the built environment
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Acknowledgement
Author great pleasure in acknowledging the people who had extremely helped me to complete my
assignment.
First of all, author would like to thank my parents for their encouragement and guidance also who gave me
this opportunity to follow Quantity Surveying at BCAS.
Autor take this great opportunity propose my honest thanks to MS.Rooshan shahani who is our module
lecturer and assessor for guiding me on management. she did a great job for this module and she taught us
very clearly. It has helped me to complete this project properly.
Finally, author would like to thank my classmates, seniors and every single person who helped me in their
own way to finish this Project with related thoughtful idea’s and co-operation to make this assignment
successful.

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Table of Contents
Acknowledgement ........................................................................................................................................ 1
List of figures ................................................................................................................................................ 5
List of tables .................................................................................................................................................. 5
Appendix ....................................................................................................................................................... 5
KPI-key performance indicator ..................................................................................................................... 5
PFI-private finance initiative ........................................................................................................................ 5
PPP-public private partnerships .................................................................................................................... 5
LTD-Limited ................................................................................................................................................. 5
MBO-management by objective ................................................................................................................... 5
Introduction ................................................................................................................................................... 6
LO 1 Understand the evolution of management principles and their application to the construction and built
environment sector ........................................................................................................................................ 7
Task 1.1 Explain the principles of management used in the construction and built environment sector. .... 7
M 1.1 ............................................................................................................................................................. 8
01.Maslow ................................................................................................................................................. 8
02.McGregor’s theory X and Y ................................................................................................................ 9
03.Herzberg’s two factors theories ......................................................................................................... 10
04. Drucker ............................................................................................................................................. 11
Principles of management. ...................................................................................................................... 11
D 1.3 While explaining the principles of management indicating a construction company, criticize how
Maslow and Peter Drucker’s theories are not applicable all the times in your own words. ....................... 15
Not disadvantages, but inadequacies ...................................................................................................... 16
Task 1.2 Explain the influence of human resources management on the performance of individuals and
teams ........................................................................................................................................................... 17
LO 2 Understand the construction and built environment sector in terms of structure and structures and
activities. ..................................................................................................................................................... 18
Task 2.1 Discuss the structure and activities of the construction and built environment sector. ................ 18

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Task 2.2 Evaluate the organizational structures and approaches used in the construction and built
environment. ............................................................................................................................................... 19
01.Functional and staff relationships ...................................................................................................... 19
concepts of responsibility ....................................................................................................................... 21
2. Corporate theories .............................................................................................................................. 22
03.Centralized and decentralized organizations ...................................................................................... 23
04.projet based organization ................................................................................................................... 23
05.job design ........................................................................................................................................... 24
06.Team structure ................................................................................................................................... 25
07.Team work ......................................................................................................................................... 26
M3.3 ............................................................................................................................................................ 30
Organizational ............................................................................................................................................. 30
Monthly progress .................................................................................................................................... 34
Management Principles ........................................................................................................................... 39
Task 2.3 when a project size increases, the complexity of the project will often increase as well. discuss
how the scale and size of contracts influence business practices within the construction and built
environment sector ...................................................................................................................................... 40
Scale and size of contracts ...................................................................................................................... 40
M1.1 ............................................................................................................................................................ 42
Cost reimbursable contracts .................................................................................................................... 42
LO 3 understand management techniques used in the construction site and built environment sector. ..... 46
Task 3.1 Explain the use of planning in the management of construction projects. ................................... 47
Types of Planning ................................................................................................................................... 48
Task 3.2 Explain how procurement scheduling and control are managed in your selected construction
company while indicating below elements. ................................................................................................ 49
Task 3.3 Explain how quality control and risk management are managed in a construction firms. ........... 49
LOC 04 understand the method of procurement and contracting used in the construction and built
environment sector. ..................................................................................................................................... 50

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Task 4.1 Evaluate the procurements methods used in any construction company as you prefer. .............. 50
Procurement methods .............................................................................................................................. 50
M2.1 ............................................................................................................................................................ 52
4.2 (P4.2, D3.1) explain the use of contracts to manage construction projects .......................................... 54
Offer and Acceptance ............................................................................................................................. 54
Intention to create Legal Relationship .................................................................................................... 54
Lawful Consideration .............................................................................................................................. 54
Capacity of Parties .................................................................................................................................. 55
Free Consent ........................................................................................................................................... 55
Lawful Object ......................................................................................................................................... 56
Possibility of Performance ...................................................................................................................... 56
Not Declared to be void or Illegal ........................................................................................................... 57
Legal Formalities .................................................................................................................................... 57
use of contract ......................................................................................................................................... 57
D 3.1 ............................................................................................................................................................ 58
4.3 evaluate the impact of procurement techniques on the organization and operation of construction firms
and construction projects ............................................................................................................................ 59
Impact of procurement ............................................................................................................................ 59
Site visit possible evidence ..................................................................................................................... 60
Conclusion .................................................................................................................................................. 61
List of references ......................................................................................................................................... 62

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List of figures
Figure 1 ......................................................................................................................................................... 8
Figure 2 ....................................................................................................................................................... 10
Figure 3 ....................................................................................................................................................... 20
Figure 4 ....................................................................................................................................................... 25
Figure 5 ....................................................................................................................................................... 31
Figure 6 ....................................................................................................................................................... 32
Figure 7 ....................................................................................................................................................... 34
Figure 8 ....................................................................................................................................................... 60
List of tables
Table 1 ........................................................................................................................................................ 52
Appendix
KPI-key performance indicator
PFI-private finance initiative
PPP-public private partnerships
PVT-private limited
LTD-Limited
MBO-management by objective

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Introduction
Management is most important in an organization or construction site. Management is a creative force
which helps in the optimum utilization of resources. It arranges the factors of production, assembles and
organize the resources, integrates the resources in effective manner to achieve goals.
There are four main tasks in this assignment. Task 2.1 is drama. Task 3.2, task 3.3 and task 4.2 are class
room activities. Other tasks are reports. The assignment says about the management of principles, human
resources and their activities, structures and activities of the construction, organizational structure and how
to evaluate an organizational structure, about the contract and their types, planning and the Gantt chart,
procurement and the goods and services, Risk management, procurement methods and their activities, about
the contracts to manage construction projects and the key performance and benchmarking.
I have completed this assignment as an individual. I got all the information from that particular
company and our exercise book notes, library book etc. I have done as my best for this
assignment.

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LO 1 Understand the evolution of management principles and their application
to the construction and built environment sector
Task 1.1 Explain the principles of management used in the construction and
built environment sector.
Principles of management
In the construction and building industry, the role of managers are significant since it is essential that each
task is managed effectively in the company. Through conductivity of various activities in the organization,
the manager ensures constant production of the service.
It is essential that the jobs are broken into smaller parts and most qualified employees selected to perform
the jobs. The employees must be monitored to ensure that they are following suggested methods.
It is essential for the managers to keep track of each activities to ensure that is completed at required rate
so the task can accomplished at the desired date. There are many functions of managers but planning,
organizing, leading, monitoring and controlling are their main functions. Now various principle of
management in the construction industry are discussed below.
Discipline and Division of Work
It is essential to maintain the discipline in the organization to conduct the activities successfully. The
employees must be classified in terms of their area of specialization, which aids in the growth of
productivity of the employees and the effectiveness of the operation.
Authority and Unity of command
The manager should have the power to give orders and the manager should have clear understanding of his
roles and responsibilities. Unity of command should be there.
Scheduling
It is one of the effective activities in the construction and building project. All the functions must be
scheduled effectively, which helps to meet the fixed timeline. Thus, the manager must control the situation
for managing activities’ schedule.

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M 1.1
01.Maslow
The Maslow’s hierarchy of needs one of the best theory of motivation. It created by Abraham Maslow on
1943. Maslow proposed five kinds of needs of human such as basic needs, safety needs, social needs, esteem
needs and self-fulfilment needs. Explain about Maslow’s hierarchy of needs such
According to above picture is mentioned as
Basic needs – shelter, cloth and food are as basic needs. Employees’ point of view the salary relevant to
basic needs therefore every employee is working for salary to fulfil the basic needs.
Security needs – this is one of the most valuable needs for everyone. Mostly the working employees are
expecting it because of it use for suddenly incidents such losing job, accident and etc. by this way is
considering good protection to company and employees such as fully insurance of company’s employees
and property, free health care facilities for employees, maintaining EPF, ETF and also provides free
education facility to employee’s children. It also can be good motivational strategy to increasing
productivity by employees.
Figure 1

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Social needs – it refers to culture that’s mean very closely with society. very closely with stake holders
such employees, society, suppliers and government. Makes very friendly environment inside of the
company and provides freedom to employees.
Esteem needs – it refers to get respect from others. Profession is always calling respect.
Managers and employees are mostly expecting to respect and promotion. If an employee gets promotion
then he automatically gets respect from others and also working very well.
That’s way as professional company is providing valuable respect to inside of the company’s staff and
outside of the company such as customers, government and suppliers as well. It is providing fantastic
posting and promotion to employees therefore the employees are working with very sincerely and work
hard.
Self-fulfilment needs –it a top-level need of human, when a person satisfied with last four needs after that
move on that self-fulfilment need. As a company point of view all the companies are trying to show
additional performance. That’s mean year end of the target 15mn but the company or like a sales
representative achieves 20mn.
02.McGregor’s theory X and Y
The theory of X and Y developed by Douglas McGregor in 1960, the book of Human side of enterprise. It
also type of motivational theory. That as classified into two borders categories such as theory X, that like
as authoritarian management style and theory Y, which called as participate management style.
Theory X
According to mind tools that mentioned as theory X it’s called autocratic leadership style. Which this
employees are dislike working and unmotivated. According to this type of organizations mostly tend to be
high heavy and also the top-level managers and supervisor both have to control the workers at every step.
Mostly you can see it in large production companies.
Theory Y
According to mind tools that mentioned as, that theory Y against to theory X. meaning of that the employees
are happy to work and self-motivated as well as enjoy working with fair responsibility. In this type of
organizations, employees at lower levels of the organization are involved in decision making process.

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03.Herzberg’s two factors theories
The two – factors theory is defined as that there are certain factors in work place that are motivating and
engaging to employees for get better performance from them. Some certain factors that are related to job
satisfaction, while some different factors that are associated with job dissatisfaction.
Low High
Job satisfaction
Job satisfaction
High Low
According to above picture, as mentioned there are two factors available that are motivation factor and
hygiene factor. Motivation factors are based on individual’s need for personal growth. It includes promotion
opportunities, responsibility, achievement, recognition and job interest where motivator factors actively
create job satisfaction if those factors are effective then employees can motivate therefore they achieve their
target and provides good performance.
Another factor as hygiene that based on the need to for a business to avoid unpleasantness at work. Hygiene
factor includes quality of supervision, rate of pay, company policies, personal life, job security and relation
with others. If the company provides hygiene factors to employees, then that company get fantastic
productivity from them and eliminate employee dissatisfaction as well.
Figure 2
Hygiene factors
• Quality of supervision
• Pay
• Company policies
• Physical working
• Conditions
• Relation with others
• Job security
Motivation factors
• Promotion Opportunities
• Opportunities for
personal growth
• Recognition
• Responsibility
• Achievement

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04. Drucker
According to Drucker 1974, he mentioned the money in very important in order to motivate the
employees.in case money is a factor which motivates employees. Furthermore, any amount of human
relations cannot compensate for a lack of monitoring rewards. If the reward is right, good human relations
will give that additional zest to a team and motivating them to give their best efforts. As you know any
company can reach their goal quickly if they give many monetary rewards rather than non-monitory
rewards. Drucker has mentioned some keys to before give monitory rewards such the performance of
employees, how much time to take complete the tasks, establishing and maintaining the relationship with
others and taking responsibility for the relationship with others as well. Further the setting objective is one
of the key methods of motivation and the profit targets are important stimuli.
Principles of management.

Managing Ambiguity and Paradox
The ability of the managers to hold two opposing ideas in mind at the same time and still be able to function
effectively.

A basis for action
A culture of impatience with lethargy and inertia that otherwise leaves organizations unresponsive.

Close to the customer
Staying close to the customer to understand and anticipate customer needs and wants.
Autonomy and Entrepreneurship
Actions that foster innovation and nature customer and product champions.
Productivity through people
Treating rank- and- file employees as a source of quality.
Hands- On, Value- Driven
A management philosophy that guides everyday practice and shows management’s commitment.




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stick to the Knitting
Stay with what you do well and the business you know best.
Simple form, Lean Staff
The best companies have very minimal, lean headquarters staff.
Simultaneous Loose
Autonomy in shop- floor activities plus centralized values.

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Henry Fayol
Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an engineer at a large
mining company in France. He eventually became the director, at a time when the mining company
employed more than 1,000 people.
Through the years, Fayol began to develop what he considered to be the 14 most important principles of
management. Essentially, these explained how managers should organize and interact with staff.
In 1916, two years before he stepped down as director, he published his "14 Principles of Management" in
the book "Administration Industrially et Générale." Fayol also created a list of the six primary functions of
management, which go hand in hand with the Principles.
Fayol's "14 Principles" was one of the earliest theories of management to be created, and remains one of
the most comprehensive. He's considered to be among the most influential contributors to the modern
concept of management, even though people don't refer to "The 14 Principles" often today.
The theory falls under the Administrative Management school of thought (as opposed to the Scientific
Management school, led by Fredrick Taylor).
Fayol's 14 Principles of Management
Division of Work
When employees are specialized, output can increase because they become increasingly skilled and
efficient.
Authority
Managers must have the authority to give orders, but they must also keep in mind that with authority comes
responsibility.
Discipline
Discipline must be upheld in organizations, but methods for doing so can vary.
Unity of Command
Employees should have only one direct supervisor.

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Unity of Direction
Teams with the same objective should be working under the direction of one manager, using one plan. This
will ensure that action is properly coordinated.
Subordination of Individual Interests to the General Interest
The interests of one employee should not be allowed to become more important than those of the group.
This includes managers.
Remuneration
Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial
compensation.
Centralization
This principle refers to how close employees are to the decision-making process. It is important to aim for
an appropriate balance.
Scalar Chain
Employees should be aware of where they stand in the organization's hierarchy, or chain of command.
Order
The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
Equity
Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with
kindness where appropriate.
Stability of Tenure of Personnel
Managers should strive to minimize employee turnover. Personnel planning should be a priority.
Initiative
Employees should be given the necessary level of freedom to create and carry out plans.
Esprit de Corps
Organizations should strive to promote team spirit and unity.

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D 1.3 While explaining the principles of management indicating a construction
company, criticize how Maslow and Peter Drucker’s theories are not applicable
all the times in your own words.
Maslow was described by peter Drucker as the father of humanist psychology but Drucker look issue with
Maslow’s hierarchy, complaining that he had not seen that a want changes in the act of being satisfied.
Hence as a want approaches satiety its capacity to reward, and with its power as an incentive diminishes
fast and so top executives can never be paid enough for them to be satisfied.
Maslow theory is basic needs and the high level needs he showed in that structure. From the job security,
we cannot get everything which is important to our life. We should have sufficient salary for our job. So,
they didn’t discussion about that. If we want a self-respect we should have an own vehicle and an own
house. So, from the physiological needs he should discussion about the shelter. It just told about the skills
of an employee, and the culture of him. So, some of the time we cannot use this principles for the
organization.
Disadvantages of MBO
• It has to be systematically done
• There is more importance given to the setting of the goals than on the actual outcome or course of
action
• It may lead to polarization of efforts, whereby, people or departments are not motivated to look
beyond their own targets and help others
• It does not take into consideration, the environment I which the goals are set, like available
resources, stake holders, etc
• To avoid potential problems SMART and SMARTER objectives need to be agreed upon
• There is no stimulation of innovation
• Managers start believing in the concept of an “ideal employee” and evaluate their subordinates
based on what they expect they should be
• Targets can be misreported and objective setting may become counter –productive to the
organization
• Quality of goals set may be poorer or too unrealistic
• It is time-consuming to implement and difficult to maintain

Management principals and application for construction and the built environment
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• Setting production targets may encourage resources to meet those targets through whatever means
necessary, which usually results in poor quality
• It is not easy to identify all the objectives
Disadvantages
• Certain issues make the theory difficult, if not impossible, to test. Part of the difficulty lies in the
definitions and measurements involved in the studies. Maslow based his theory on clinical
observation, not on scientific research using large population samples.
• Maslow's claim that people will not be motivated by higher-order goal such as self-actualization
until their lower-order needs such as food and shelter have been met, is evidently not valid. People
have been known to put abstract religious or altruistic values before their own survival
for example.
Not disadvantages, but inadequacies
• The concept of self-actualization suffers from vague definitions and a lack of evidence other than
anecdotal.
• The theory does not take into account the possibility of cultural differences, but assumes that the
same needs apply equally to all human societies.
• The theory does not take into account the possibility of individual differences, but assumes that the
same needs in the same order apply equally from one person to another regardless of personality.

Management principals and application for construction and the built environment
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Task 1.2 Explain the influence of human resources management on the
performance of individuals and teams.
Human resource management is the function that is performed within the organization for maximizing the
performance of the employees. Human resource management can be implemented in order to gain the
strategic objectives of the organization.
The main activities that are performed by the human resource managers are recruitment of the employees,
provision of training and development, rewarding, performance appraisal etc. Here it can be said that
principles and the practice of human resource management that is implemented in an organization can
significantly influence the performance of the teams and the individuals within the organization.
Here it can be said that the human resource management helps inn evaluating various policies and practices
that helps increasing the performance of the individuals and the teams in the organization.
The incentive and reward policies are one of the effective activities that are performed by the human
resource managers and it can significantly increase the motivation of the employees. The employees can be
highly motivated if the reward of god performance of individuals or a team can be ensured by the
organization in terms of recognition or certain benefits.
Effective human resource management can also increase the performance of the individuals and the team
in terms of conflict resolution. In highly managed teams, the conflicts are lower and it is resolved quickly
in the organization. This increases the efficiency of the team and individuals. Here the team dynamic should
be analyzed and communication should be maintained effectively within the organization.
It is very important to give the roles and responsibility to the team members according to their abilities and
capabilities. This can help in increasing the efficiency of the entire team as each individual can perform
better. Maintaining equity within the organization by abolishing any form of discrimination can also
increase the efficiency of the individuals. So these are the main human resource management programmers
that can help in increasing the performance of the individuals and teams in the organization.

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LO 2 Understand the construction and built environment sector in terms of
structure and structures and activities.
Task 2.1 Discuss the structure and activities of the construction and built
environment sector.
Drama

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Task 2.2 Evaluate the organizational structures and approaches used in the
construction and built environment.
01.Functional and staff relationships
direct line
Line relationship refer to links between top level people and low-level people who work for them. In this
chart above the General Manager has a line relationship with the Branch Manager, these lines tend to be
vertical.
General Manager is in charge of the organization.
The next in charge, and directly responsible to the general manager is the branch manager. There is a line
relationship between the two. The general manager is the line manager to the branch manager.
The three assistant managers come next in the line of authority and are directly responsible to the branch
manager and indirectly to the general manager. The branch manager is their line manager.
The four departmental managers are below the assistant managers in authority. The three assistant managers
collectively have authority over the four department managers.
Lateral relationships are between people on the same level. In the chart on the previous page the Project
manager and finance manager are on the same level of authority, and this is shown by a horizontal line that
mean lateral line.

chain of command
In blue ocean group of companies the line of communication upwards is department staff, department
manager, assistant managers, branch manager, general manager and back the same way. This is called as
chain of command.

Management principals and application for construction and the built environment
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span of control
How many employees are reporting to one manager?
It depends on scale of the project & Existing work of the site. We have 20 ongoing residential apartment
projects and about 1500 employees (labors & staff). About 50 employees are reporting to one manger.
Board of Directors
Construction Managers
Sub-contractors
01
Supervisor
01
Labourers
40
Store Keeper
01
Electrical Engineer
01
Trainees
02
Site Engineer
01
Mechanical Engineer
01
Project Director
01
1
Quantity surveyor
01
Figure 3

Management principals and application for construction and the built environment
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concepts of responsibility
Duty
It used to be the case that a construction professional’s duty to their client, like that of other professionals
such as solicitors, lay purely in contract, and not in tort. One of the most important results of this was that,
for the purposes of limitation, time began to run at the date of the breach of contract and not, as in the tort
of negligence, from the often much later date when damage occurred or could reasonably have been
discovered. There is now universal judicial agreement that the liability of a professional person to their
client arises both in tort and in contract.
Authority
Authority is one of the founding stones of formal and informal organization and is the right or power
assigned to an executive or a manager in order to achieve certain organizational objectives. According to
Henri Fayol, "Authority is the right to give orders and the power to exact obedience." Authority is delegated
from above but must be accepted from below i.e. by the subordinates. In other words, authority flows
downwards.
Accountability
The authority is delegated to a subordinate, and person is accountable to the superior for performance in
relation to assigned duties. If the subordinate does a poor job, the superior cannot evade the responsibility
by stating that poor performance is the fault of the subordinate. A superior is normally responsible for all
actions of groups under his supervision even if there are several layers down in the hierarchy. Simply stated,
accountability means that the subordinate should explain the factors responsible for non- performance or
lack of performance.
Delegation
Delegation is the transfer of authority to make decisions and complete specific tasks. Learning how to
delegate is one of the most important skills for managers and leaders to possess. Strong delegation
techniques can help managers save time, motivate people, and train people, as well as these techniques can
enable managers to take on new opportunities. However, the lack of delegation practices often leaves people
frustrated, unmotivated, and under-trained, while the manager remains overworked. Delegation is a skill
that enables managers to achieve more without burning themselves out.

Management principals and application for construction and the built environment
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2. Corporate theories
Mission
They always strive to provide their stakeholders with the highest quality professional services unparalleled
by any through their commitment, ethical & timely services exceeding the expectations of their stakeholders
to achieve strong lasting relationships.
Strategy
The core business philosophy behind the Company is the “Blue Ocean Strategy”, which generally refers to
“the creation by a company of a new, uncontested market space that makes competitors irrelevant and that
creates new consumer value, often while decreasing costs.” In other words, creating and taking a completely
new concept to the market, by lowering costs, thereby delivering an affordable product to existing and new
customers, while eliminating competition.
Strategic Alliances
The world of construction is changing. The public and the private companies in the construction field tend
to work more closely and joint ventures are expected to deliver end-to-end solutions and new form of
contracts enriched with collaborative supply chains. Partnering has always been the core of the Blue Ocean
Residencies approach, and we're proud of their successful lasting relationships with other business entities.
Strategic Direction
Their Group has set a clear strategic direction developed by professionally qualified, competent and
experienced corporate planners. The Group continues performing well in line with the expectations despite
the current challenging economic environment. We will continue to build and maintain their position as a
strong global brand in the worldwide market. Having aligned with the Group’s hierarchy and its high-
quality portfolio, we now continue on the path towards sustained profitability and the creation of new
business opportunities for the company and their customers around the world.
Vision
To be the most successful and respected leading business conglomerate in the South East Asia

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Policies
Blue Ocean Group and its subsidiary companies are equal and comprised of diverse employers. The
companies’ policy is to ensure that all the job applicants, employees and contractors are treated equally
Objectives
Company’s objective is to make property investment a moveable liquid asset enabling investors to cash
their properties at the prevailing appreciated market price whenever they wish to dispose their acquired
properties.
Values
In blue ocean group of company,
• Integrity is Opened with Transparency
• Quality is Geared with Uncompromised
• Discipline is The Ultimate Path to Success
• Flexibility is To Gear to Meet All Contingencies
• Safety is Assurance with Modern Technological Apparatus
• Service is With Emphasis On Excellence
03.Centralized and decentralized organizations
Centralized organization concentrate authority and decision making to the top. Recentralization move it to
bottom levels creating greater accountability
04.projet based organization
A project team that has strong and separate identity and develops and high level of commitment from its
members. If the authority is centralized, the ability to make a swift decision is enhanced. Unity of command
exists. Pure project or organizations are structurally simple and flexible, which makes them relatively easy
to understand and implement. The organizational structure tends to support a holistic approach to the
project.

Management principals and application for construction and the built environment
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05.job design
Job design is the process of
• Deciding the contents of the job.
• Deciding methods to carry out the job.
• Deciding the relationship which exists in the organization.
Job analysis helps to develop job design and job design matches the requirements of the job with the human
qualities required to do the job.
According to Michael Armstrong,
"Job Design is the process of deciding on the contents of a job in terms of its duties and responsibilities, on
the methods to be used in carrying out the job, in terms of techniques, systems and procedures, and on the
relationships, that should exist between the job holder and his superior subordinates and colleagues."
Job analysis helps to develop job design and job design matches the requirements of the job with the human
qualities required to do the job.

Management principals and application for construction and the built environment
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Figure 4
06.Team structure

Management principals and application for construction and the built environment
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07.Team work
Blue ocean residencies (Pvt) Ltd
The creator of iconic architectures in Sri Lanka, Blue Ocean Residencies (Pvt) Limited has been in the
limelight of the construction field for many years. The architectural marvels built by the Company enjoy
great demand no sooner than they are in the market. The company’s goal is to offer highest quality at an
affordable price, always ready to walk an extra mile to meet the customers’ requirements. In Blue Ocean
Residencies apartments, luxury is found not only in modern facilities, but also in proximity to nature and
harmonious neighborhood community.
Blue ocean Investment
By providing sound financial and consulting services for real estate investors, Blue Ocean Investment (Pvt)
Limited has become the Sri Lanka’s most sought after real estate investment company now. The company
purchase island-wide properties and develop them to meet the expected profit targets. The company also
provides consultation to improve existing real estate projects.
Blue ocean reality
The outstanding real-estate developer and constructor of luxury sky-scrape apartment complexes and
buildings in Sri Lanka, Blue Ocean Realty (Pvt) Limited has now arrived at the peak of its field. The
company has many an iconic development scheme to its name and is building new state of the art real-
estate projects in the Colombo city and its suburbs.
Blue ocean legend
Blue Ocean Legend (Pvt) Limited engages in developing real estate and building luxury residential
apartments. With the dawn of peace in Sri Lanka, the company employs its maximum potential to assist the
Sri Lanka’s vision of being the Miracle of Asia. A professional of the construction field in Sri Lanka, the
company now engages in many a remarkable construction projects in and around the Colombo city.
link construction
The creator of iconic architectures in Sri Lanka such as Kandalama Hotel, Link has now formed its new
related subsidiary named Link Construction (Pvt) Ltd in the field of real-estate and property development.
Link Construction will be focused on new luxury apartment development in and around the Colombo region
with European architecture practice followed by the group.

Management principals and application for construction and the built environment
27
properties(PVT) LTD
The prestigious real estate buying and selling company, Blue Ocean Properties (Pvt) Limited provides
pieces of land from most sought-after locations in Sri Lanka. The company also assists customers in
obtaining fast bank loans for acquiring real estates and provides after-sale services such as conversion of
sold properties to high return investment projects.
Blue ocean global LTD(UK)
The global arm of Blue Ocean Group of Companies for European Region, Blue Ocean Global Limited is
based in the United Kingdom. It provides ideal solutions for migrated Sri Lankans and European citizens
to get involved in real estate and construction investments in Sri Lanka.
link engineering (PVT) LTD.
The ICTAD award winner for many years, Link Engineering (Pvt) Limited has 34 years long experience of
building bridges and carrying out water and electricity projects. The pioneer of iconic construction projects
in various fields, the company is now in the forefront of rebuilding Sri Lanka from the ruins of its three-
decade long war.
sisisira builders (PVT) LTD.
A well-known organization operating successfully in the field of Civil and Electrical Engineering was
established in the year of 1982. Since its formation, the company has undertaken many civil engineering
projects for Government as well as Non-governmental organizations located island wide. Sisira Builders is
now a fully owned subsidiary of Blue Ocean Group of Companies and been operated under sound corporate
management.
blue ocean engineering (PVT) LTD
The supplier of plant machineries and materials for construction field, Blue Ocean Engineering (Pvt)
Limited is the place that government and private sector constructors seek in Sri Lanka to finish their
constructions in time. The company imports most sought-after construction equipment, power energy
generators, and passenger elevators and related engineering materials which are highly demanded in Sri
Lanka.

Management principals and application for construction and the built environment
28
Blue ocean construction and development (PVT) LTD.
The Consultants and Contractors to Restoration and Reconstruction, Blue Ocean Construction and
Development (Pvt) Limited engages mainly in private housing design and building projects. The clientele
and customers of the company include famous personalities and iconic commercial giants. It enjoys high
demand in the field with a turnover worth of billions.
blue ocean technologies (PVT) LTD.
This highly qualified and most sought after Essential Maintenance Practice (EMP) consultant and contractor
of Residential, Commercial and Industrial Projects enjoys great demand in Sri Lanka. The company has
built a high number of iconic construction projects and provided consultation to many a project in many
field. Today the company engages in many outstanding construction projects in Sri Lanka.
ink overseas (PVT) LTD.
The specialist in Civil Engineering Construction, Link Overseas (Pvt) Limited keeps the flag of the ICTAD
award winner Link Engineering (Pvt) Limited fluttering in the sky all over the world. The company is
specialized in building roads, bridges, infrastructures, utility projects and many more in civil engineering
field.
Link engineering consultancy bureau(PVT) LTD
One of the foremost engineering and architectural consultancy companies in Sri Lanka, Link Engineering
Consultancy Bureau (Pvt) Limited possesses vast knowledge of variety of disciplines in engineering and
architecture. With millions worth of turnover, the company now stands firm in the field providing a great
example for other similar companies via sound ethical business practices.
Achievers business enterprise(PVT) LTD
The collector of the highest number of second-hand clothes and related accessories for Men, Women and
Children, Achievers Business Enterprise (Pvt) Limited is the most affordable retailer of clothes in Sri
Lanka. The company imports second-hand garments as well as collects quality local clothes as well.
Irrespective of gender, size, and fashion, all types of garment are available from Achievers Business
Enterprises (Pvt) Limited now.
blue ocean home appliances (PVT) LTD
The importers of high quality, brand new home appliances, Blue Ocean Home Appliances (Pvt) Limited
supply any brand of home appliances from prestigious international companies. The electronic appliances

Management principals and application for construction and the built environment
29
for living and dining rooms, bedrooms, kitchens, bathrooms and every other place in and around a modern
home are available from Blue Ocean Home Appliances (Pvt) Limited for affordable prices.

Management principals and application for construction and the built environment
30
M3.3
Organizational
Blue Ocean Group of Companies has organized in a method to gain maximum Productivity and efficiency
from their Staff. To achieve their ultimate vision company formed their Organization to different levels
starting from the Chairman and end with divisional Officers. Fundamentally, Company has eight
departments as follows;
• Quantity Survey Department
• Planning and Procurement Department
• Engineering Department
• HR/Admin Department
• Marketing Department
• IT Department
• Finance Department
• Legal Department
Each and every department has Specific work in the Company and they all have Qualified Head of the in
charges to Monitor and Control all the works. All these departments has mutual Understanding and mutual
Support to achieve Company vision and contribute their maximum for Companies wellbeing.
All the Projects initiate under the Supervision of Chairman and approval from the Board of Consultants
then process moves towards QS Representatives, Charted Civil Engineers and Consultants, Procurement
Representatives, Engineering Representatives, Marketing Representatives and Finance Representatives
Orderly.
Mostly, Strategic Planning Control is doing by Engineering Representatives they are doing Project
Evaluation and Project Management too.

Management principals and application for construction and the built environment
31
Figure 5
organization structure

Management principals and application for construction and the built environment
32
Construction of Apartment project at
No.19, BARNES AVENUE,
MOUNT LAVENIA.
Figure 6
2016
CONTRACTOR
LINK ENGINEERING (PVT) LTD
No. 32 2nd Floor,
Galle Road,
Dehiwala.
CLIENT
BLUEOCEAN PROPERTIES (PVT) LTD
No. 32 2nd Floor,
Galle Road,
Dehiwala.

Management principals and application for construction and the built environment
33
Visited site information’s
Project: APARTMENT PROJECT NO.19, BARNES AVENUE-MT-LAVANIA.
Client: BLUE OCEAN GROUP OF COMPANIES PVT LTD,
2ndFloor, Galle Road,
Dehiwala
Contractor: LINK ENGINEERING PVT LTD
No.32, 2nd Floor, Galle Road.
Dehiwala
Date of Commencement : 29thOF APRIL 2016
Intended Date of Completion : 31TH OF OCTOBER 2017
Contract Period : 512 days
Description of project
Blue Ocean at Barnes Avenue is a 7-storey, 18-unit condominium with a unique appearance, 1 swimming
pool, 1 staircase and 1Lift core for passenger lift.
There are 18 apartment units which including two bedrooms and three bedrooms

Management principals and application for construction and the built environment
34
Monthly progress
Figure 7

Management principals and application for construction and the built environment
35
01-What is the type of construction project, residential or commercial?
Residential
02-what is the organizational structure of your company?
03-How many employees are reporting one manager?
04-Can you tell about your corporate theories?
05-Is the company centralized or decentralized?
The company is decentralized
decentralized organization
Because blue ocean group of company have lot of subsidiary companies in Sri Lanka. they manage the
most of the construction related activities with that subsidiary companies, so that they are following
decentralized organization structure.
Mr. Thumilan Sivarajah is the Founder and Group Chairman of Blue Ocean Group of Companies, Link
Engineering (PVT) Ltd, Sisisira builders (PVT) Ltd, Educational academics and etc. more than this blue
ocean group of companies have some branches in different foreign countries also. so that company
organization was decentralized. but most of the major decisions are taken by the top-level management of
blue ocean group of companies.
A decentralized organization is able to make decisions more quickly than one with a centralized structure.
for an example, blue ocean group of companies have engineering department, quantity surveying
department, procurement department and etc. Every department have specialized senior managers, if any
problem came in that department, that problem will try to solve within that department. A manager often
can make a decision without having to wait for it to go up a chain of command, allowing the organization
to react quickly to situations where fast action required.
decentralizing takes some of the burden of daily business operations off the business owner. When the
owner allows others to perform such tasks as hiring new employees or ordering supplies, this frees her up
to spend more time on big-picture items, such as planning for expansion or meeting with important clients.
Blue Ocean Group Chairman Mr. Thumilan Sivarajah also like to expand the company in Sri Lanka and all
over the world. he will continue to build and maintain companies position as a strong global brand. In the

Management principals and application for construction and the built environment
36
last two years, they have managed to strengthen their company reserves, increased our turnover and
improved their capital position.
06-Can you explain what type of procurement methods your company is using?

Management principals and application for construction and the built environment
37
07-Why did you select this type of method?
Reason for select this method
Management procurement methods are best suited to large, complex, fast moving projects
where early completion is desirable.
This method of procurement depends upon a high degree of confidence and trust. There is no
firm contract price before the work starts on site, and the decision to go ahead usually has to
be taken on the basis of an estimate.
The management contractor is the agent of the client, and should therefore put their interests
first throughout the project.
It is an advantage to appoint the management contractor at early stage, so that their knowledge
and expertise are available to the design team throughout the preconstruction period.
Much of the detailed design work can be left to proceed in parallel with the site operations for
some work packages, thus reducing the time needed before the project starts on-site.
The client has a considerable degree of flexibility on design matters. The design can be adjusted
as construction proceeds, without sacrificing cost control. This would not be possible with
traditional methods.
The management contractor can select specialists and order materials with long lead-in times
for delivery in good time without any of the uncertainties and complexities which attend
traditional nomination procedures.

Management principals and application for construction and the built environment
38
The project proceeds on the basis of a contract cost plan, but an independent quantity surveyor
is required for effective cost control.
A competitive tendering element is retained for all works contracts, which usually account for
most of the overall prime cost. Tenders for works packages will normally be on a lump sum
basis.
08-What kind of drawbacks are you facing when adopting the particular procurement method?
• price certainty is not achieved until the final works package has been let
• Informed and proactive client is required.
• poor price certainty
• close time and information control required
• client must provide a good quality brief to the design team as the design will not be complete until
resources have been committed to the project (Construction management and management
contracting);
• Client loses direct control of design quality which is influenced by the constructors (design and
manage).
09-What are the contract documents used in your company?
10-How do you going to have proper net working within the project?

Management principals and application for construction and the built environment
39
11-Can you tell about your management of principal?
Management Principles
Quality of Service: -"To be skilled in all round performance in the relevant fields to fulfill customers’
need"
Safe and Conducive Work Environment: -"Maintain smooth and safe work practices to ensure healthy
atmosphere to everyone concerned"
Integrity and Openness: -"Maintain the standards which transpires coveted principles"
Social Responsibility: -"To be fully conscious of the community and its welfare"
Corporate Governance: -"Maintain smooth and safe work practices to ensure healthy atmosphere to
everyone concerned"
Return on Investment: -Manage soundly to yield healthy returns for their customer.

Management principals and application for construction and the built environment
40
Task 2.3 when a project size increases, the complexity of the project will often
increase as well. discuss how the scale and size of contracts influence business
practices within the construction and built environment sector
Scale and size of contracts
Construction sector is greatly affected by the scale and the size of the contract. Business performances and
structure of organization followed within the construction industry can be influenced by the size and scale
of the contract.
For example, when it comes to small sized business organization, the management can easily control and
keep track of business activities. But, it will be tough for the management to keep track of each and every
activity of project, when it comes to large project. Due to this reason, management tend to choose various
types of contracts.
Contracts listed below are common and very much popular within the construction sector.
• Cost reimbursable contracts
• Fixed Contracts
• Time and Material Contracts
In the Cost reimbursable contract, the cost of the contract is adjustable and the invoice generation from the
actual work site assembles the value. In this kind of contract, the it is essential for invoices to have
comprehensive breakout of the value. If not, then the contracted has the right to delay the payment schedule.
However, since the cost of the project is variable, contracted has the risk of greater expenses in this type of
contract.
One of the mostly followed contracts by the construction companies is fixed contracts. This is a type of
contract that is progressed through the accepted approximate cost along with a special facility for the further
increases in cost in the cases of special circumstances. By scheduling the project properly, companies can
utilize the profit of early termination, which is profitable for the construction companies.

Management principals and application for construction and the built environment
41
The time and material contract is a win-win situation for both the parties as it is unclear about the slope of
the project. The contract is progressed through the accepted rate on the daily rate through the comprehension
of the overhead, direct cost, indirect cost and the mark-up cost. In order to make sure that the project does
not go over the estimated cost by large, it is essential for both parties to have clear understanding on the
cost and the slope of the project. Crossing the estimated cost could hinder the financial profitability of the
contracted.

Management principals and application for construction and the built environment
42
M1.1
Make judgment which contractual methods you will be selecting or suggesting someone if you are a
contractor?
I will select Cost reimbursable contracts for my company.
Cost reimbursable contracts
In the Cost reimbursable contract, the cost of the contract is adjustable and the invoice generation from the
actual work site assembles the value. In this kind of contract, the it is essential for invoices to have
comprehensive breakout of the value. If not, then the contracted has the right to delay the payment schedule.
However, since the cost of the project is variable, contracted has the risk of greater expenses in this type of
contract.
Advantages
Full Disclosure: The owner gets to review all of the expenses of the entire project. Typically, monthly
statements are given to the owner with actual invoices for all expenditures. This gives the owner tighter
control of the associated cost. Most builders do not want the owner to play in selecting suppliers and
subcontractors, but provide financial statements.
Less risky for the builder: The builder is paid a % of the associated cost for overseeing the project, so any
cost overruns does not come directly out of the builders’ profit as in fixed price contracts.
Flexibility: Some home building projects are highly custom or the owner wishes to make slower decisions
along the way or make a lot of changes along the way. This type of contract is better in providing that
flexibility. Remember though time/changes cost money.
Cost: It is possible that the project could actually cost less under this type contract depending on the
circumstances.

Management principals and application for construction and the built environment
43
Disadvantages:
Cost: The owner is much more prone to go over budget, because of the high flexibility issues. It opens the
door to the owner to research out the, plus building products on the market today, and most of these
nonstandard building materials are much higher in price than the builders standards.
The builder is incentivized to spend more money. The more project cost the more money the builder makes.
It is especially important that there is a high trust between the builder and homeowner in this type of
contract.
Accounting: Extra time is spent by the builder preparing the monthly statements for the homeowner,
copying invoices, etc.
Which contractual method you will be selecting if you are an owner or a client?
I will select lump sum method for the company because they will fix the money before the construction
start.
Fixed price contract
A fixed-price contract, also known as a lump sum contract, is an agreement between a vendor or seller and
a client that stipulates goods and/or services that will be provided and the price that will be paid for them.
Fixed-price contracts are common in many IT contexts, including project management, procurement and
outsourcing. Having the scope and cost clearly defined from the outset saves administrative time and also
avoids much of the negotiation time required for less clear-cut types of agreements. However, the resources
and time required to produce goods or provide services must be considered carefully by the seller. Those
lacking considerable experience with similar endeavors should be wary of fixed-price contracts because it
may be difficult for them to foresee all the resources that will be required and how long various tasks will
take.
Fixed-price contracts may be inflexible or may stipulate circumstances under which adjustments may be
made. In a firm fixed-price contract, products or services must be delivered by the agreed-upon date and
the payment rendered according to the agreement. Any unforeseen costs of production must be borne by
the seller. Other variations on the model include fixed-price incentive fee contracts, in which the seller is
offered additional payment for performance beyond that stipulated in the agreement. For example, the seller
might deliver ahead of schedule or add features beyond the initial scope of the project.

Management principals and application for construction and the built environment
44
Make judgment in order which individual is playing the major roles in terms of contractual
influence?
Designer
Although contract is an agreement between owner and contractor under DBB, it may include a description
of the various services and functions the designer may provide during construction.
The designer may also have a major role in preparing many of the contract documents and compiling
documents for use by bidders and the parties.
The contract documents for design-build include design criteria, performance specifications, or outline
specifications.
Supplier
Naming suppliers allows the client to influence the main contractor's selection of suppliers, whilst leaving
responsibility for their performance with the main contractor.
To name suppliers, the client first categorizes a list of potential suppliers. They may invite these potential
suppliers to submit tenders.
The client then names a short-list of suitable suppliers in the tender documents for the main construction
contract. The tender documents allow for the named suppliers by including a provisional sum.
Contractor
plan, manage and monitor all work carried out by themselves and their workers, taking into account the
risks to anyone who might be affected by it and the measures needed to protect them.
check that all workers they employ or appoint have the skills, knowledge, training and experience to carry
out the work, or are in the process of obtaining them.
make sure that all workers under their control have a suitable, site-specific induction, unless this has already
been provided by the principal contractor.

Management principals and application for construction and the built environment
45
provide appropriate supervision, information and instructions to workers under their control.
ensure they do not start work on site unless reasonable steps have been taken to prevent unauthorized access
ensure suitable welfare facilities are provided from the start for workers under their control, and maintain
them throughout the work.

Management principals and application for construction and the built environment
46
LO 3 understand management techniques used in the construction site and
built environment sector.
Online exam

Management principals and application for construction and the built environment
47
Figure 8
Task 3.1 Explain the use of planning in the management of construction
projects.
Planning of construction
Planning is the first step of project management philosophy of planning, organizing and controlling the
execution of the projects. Project planning and project scheduling is two separate and distinct function of
the project management. Here, we will learn about the planning phase of project management.
Project planning is the function in which project and construction managers and their key staff members
prepares the master plan. Then this master plan is put into time schedule by scheduling people which is
called project scheduling. A project plan is mostly responsible for the success or failure of the project

Management principals and application for construction and the built environment
48
Planning
Planning is a bridge between the experiences of the past projects and the proposed actions that produces
favorable results in the future. It can also be said that it is a precaution by which we can reduce undesirable
effects or unexpected happenings and thereby eliminating confusion, waste, and loss of efficiency. Planning
involves prior determination, specification of factors, forces, effects and relationships necessary to reach
the desired goals
Types of Planning
The three major types of construction project planning are:
1. Strategic planning: this involves the high-level selection of the project objectives
2. Operational planning: this involves the detailed planning required to meet the strategic objectives
3. Scheduling: this puts the detailed operational plan on a time scale set by the strategic objectives.
Strategic planning is done by the owner’s corporate planners. In this they decide what project to build and
what the completion date has to be to meet the owner’s project goals. The construction teams formulate the
master construction execution plan within the guidelines set in the strategic and contracting plans.

Management principals and application for construction and the built environment
49
Task 3.2 Explain how procurement scheduling and control are managed in your
selected construction company while indicating below elements.
Task 3.3 Explain how quality control and risk management are managed in a
construction firms.
TLA (Open Book)

Management principals and application for construction and the built environment
50
LOC 04 understand the method of procurement and contracting used in the
construction and built environment sector.
Task 4.1 Evaluate the procurements methods used in any construction
company as you prefer.
Procurement methods
There are different methods, such as contractor selections, and private partnerships, are frequently
considered for the purpose of procuring resources in the construction. For the purpose of undertaking
resources for small project, contractor selection method will be the most appropriate method as it decreases
the requirement of the involvement of top level management. For large size construction projects, there is
a need of some private and public partnership within the project.
Procurement methods can be mainly divided into:
• Traditional method
• Alternative method
Procurement
A procurement system sets up the roles and relationships, which constitute the project organization. It sets
up the overall management structure and system and helps and shape the overall values and style of the
project. The section of a procurement system depends on the client’s objectives and end product, which
have a positive influence on the level of success achieved by building project.
Selective Competition
it is one of the common and traditional methods of awarding the contracts of construction. The project team
selects a number of reputed firms for tendering the project and the firms presenting the lowest tender gets
the project.
Open competition
This process is also used for tendering. Often necessary criteria are advertised in the in the local trade
publication. The maximum of the selected firms is in most cases 6 but price can be presented by any number
of firms in case of open tendering. There are restrictions on the number of available documents. The

Management principals and application for construction and the built environment
51
appropriate contractor is selected by following consultation of consultants. In open tendering, other factors
are also considered along with price.
Negotiated Contracts
Negotiated contracts is one of the most common procurement methods, which is used by organizations
nowadays. When there is there's not much competition and when the price accepted by the sole contractor,
this type of contract occurs. After pricing the documentation, it is reviewed by the surveyor of the client
and if any form of disagreements arises from the documentation, they are negotiated within the parties. The
process can add 5% cost to the contract and can lead more involvement of the contractor in the project.
Public Private Partnership
The alliance of private and the public-sector parties as said to be the public private partnership. The decision
of dividing the risks and tasks for a construction project can be decided by government and the private
sector parties. Since the public sector has limited, it can join with the private sector parties for undertaking
the cost is borne by the users of the service and not by the taxpayers, when needed. The government may
provide grant in case of infrastructural investment projects. There is also several risks associated with it. In
some cases, risky projects are undertaken by the public sector since private sector cannot take those risky
projects.
Partnering
The partnering in construction is the commitment between the architect, the consulting engineer and the
owner for avoiding any form of disputes and improving the communication among the related parties by
sharing common objectives and goals of the project. In case of partnering the surprises can be eliminated
along with the adversarial relationships and goodwill and trust can be built among the partners. Thus, it can
be said that it can benefit in the construction industry.
PFI Contracts
Private finance initiative is also a type of procurement method that can be undertaken by a construction
company. PFI is one of the methods of creating a public private partnership. In this method, the public
resources and the private capacities are used for delivering the services, specified by the public sector. The
PFI activities are related with the public procurement. PFI differs from privatization in the in the public
sector. A substantial role is undertaken by the PFI projects and it is either as essential enabler of the project
or as the ain purchaser of the service. In PFI the risk is shifted from one sector to another.

Management principals and application for construction and the built environment
52
M2.1
“Project Procurement Management includes processes necessary to Purchase or acquire products,
service or results under a Project”.
Management Procurement
Project Procurement Management process it includes four stages. The Process is interact with
group of People In Blue Ocean there were Purchasing Officers, Procurement Planning Engineer,
Project managers and Team and sellers It starts with:
1. Plan Procurement – “The Process of documenting project Purchasing decisions, the
approach, and identify potential sellers.”
2. Conduct Procurement – “The Process of obtaining Seller response, selecting a seller, and
awarding a contract”. Officers be concern to order Good Quality Materials and services
for fair Price.
3. Administer Procurement – “The Process of managing Procurement relationships,
monitoring Contract Performance, and making Changes and Correction as needed”
4. Close Procurements – “The Process of Completing each Project Procurement”.
Procurement Entry Table
No
Date
PO GRN INVOICE
Type of Material
Qty
Unit rate
Total Qty
Name of Supplier
Type of Material
Qty
No
Name of Supplier
Type of Material
Qty
Total Amount
Table 1

Management principals and application for construction and the built environment
53
Reason for select this method
• Management procurement methods are best suited to large, complex, fast moving projects where
early completion is desirable.
• This method of procurement depends upon a high degree of confidence and trust. There is no firm
contract price before the work starts on site, and the decision to go ahead usually has to be taken
on the basis of an estimate.
• The management contractor is the agent of the client, and should therefore put their interests first
throughout the project.
• It is an advantage to appoint the management contractor at early stage, so that their knowledge and
expertise are available to the design team throughout the preconstruction period.
• Much of the detailed design work can be left to proceed in parallel with the site operations for some
work packages, thus reducing the time needed before the project starts on-site.
• The client has a considerable degree of flexibility on design matters. The design can be adjusted as
construction proceeds, without sacrificing cost control. This would not be possible with traditional
methods.
• The management contractor can select specialists and order materials with long lead-in times for
delivery in good time without any of the uncertainties and complexities which attend traditional
nomination procedures.
• The project proceeds on the basis of a contract cost plan, but an independent quantity surveyor is
required for effective cost control.
• A competitive tendering element is retained for all works contracts, which usually account for most
of the overall prime cost. Tenders for works packages will normally be on a lump sum basis.

Management principals and application for construction and the built environment
54
4.2 (P4.2, D3.1) explain the use of contracts to manage construction projects
Offer and Acceptance
There must be an 'offer' and an 'acceptance' to the offer, resulting into an agreement. Both offer and
acceptance should be lawful. In order to create a valid contract, there must be a 'lawful offer' by one party
and 'lawful acceptance' of the same by the other party. Only what is offered can be accepted. This means
the offer must be accepted exactly as offered without conditions. If any new terms are suggested then it is
regarded as a counter offer which can be accepted or rejected. There can be many offers and counter offers
before the execution of an Agreement. It is not important who makes the final offer, it is the acceptance
of that offer that brings the negotiations to any end by establishing the terms and conditions of the Contract.
Acceptance can be given verbally, in writing, or inferred by action which clearly indicates and implies
acceptance (performance of the contract). In any case, the acceptance must conform with the method
prescribed by the offeror for it to be effective.
Intention to create Legal Relationship
A Contract requires that the parties intend to enter into a legally binding Agreement. That is the parties
entering into the Contract must intend to create legal relations and must understand that the agreement can
be enforced by law. The intention is to create legal relations is presumed, so that the Contract doesn’t have
to expressly state that you understand and intend legal consequences to follow. If the parties to a contract
decide not to be legally bound, this must be clearly stated in the contract for it not to be legally enforceable.
Lawful Consideration
The third essential element of a valid contract is the presence of ‘Consideration’. Consideration has been
defined as the price paid by one party for the promise of the other. An agreement is legally enforceable only
when each of the parties to it gives something and gets something in return. The something given or
obtained is the price for the promise and is called ‘consideration’. Subject to certain exceptions, gratuitous
promises are not enforceable at law. Consideration has been defined in various ways. According to
Blackstone, "Consideration is recompense given by the party contracting to another." In other words of
Pollock, "Consideration is the price for which the promise of the another is brought." Consideration is
known as quid pro-quo or something in return. The ‘consideration’ may be an act (doing something) or
forbearance or a promise to do or not to do something. It may be past, present or future. But only those
considerations are valid which are ‘lawful’.

Management principals and application for construction and the built environment
55
Capacity of Parties
The parties to an agreement must be competent to contract. If either of the parties does not have the capacity
to contract, the contract is not valid. Accordingly, the following persons are incompetent to contract.
• Minors,
• Persons of unsound mind
• persons disqualified by law to which they are subject like for
Example: -the person declared insolvent by Court.
The parties to an agreement must be competent to contract; otherwise it cannot be enforced by a court of
law. In order to be competent to contract the parties must be of the age of majority and of sound mind and
must not be disqualified from contracting by any law to which they are subject. If any of the parties to the
agreement suffers from minority, lunacy, idiocy, drunkenness, etc., the agreement is not enforceable at law.
Free Consent
Free consent of all the parties to an agreement is another fifth main essential element of a valid contract.
'Consent' means the parties must have agreed upon the same thing in the same sense. An agreement should
be made by the free consent of the parties. According to Section 14, Consent is said to be free when it is
not caused by
• Coercion
• Undue influence
• Fraud
• Misrepresentation
• Mistake.
If the agreement is vitiated by any of the first four factors, the contract would be voidable and cannot be
enforced by the party guilty of coercion, undue influence etc. The other party can either reject the contract
or accept it, subject to the rules laid down in the Act. If the agreement is induced by mutual mistake which
is material to the agreement, it would be void. The contracting parties must give their consent freely.
'Consent' means that the parties must agree about the subject matter of the agreement in the same sense and

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at the same time. Consent is said to be free if it is not induced by coercion, undue influence, fraud,
misrepresentation or mistake. The absence of free consent would affect the legal enforceability of a contract.
Lawful Object
The object of an agreement must be valid. Object has nothing to do with consideration. It means the purpose
or design of the contract. Thus, when one hires a house for use as a gambling house, the object of the
contract is to run a gambling house which is unlawful. The object of the agreement must be lawful. An
agreement is unlawful.
if it is: -
• illegal
• immoral
• fraudulent
• causes injury to the person or property of another
• the court regards it as immoral or opposed to public policy
• detrimental to the interest of the Society and State,
• it is forbidden by law,
• it involves an injury to the person or property of any other.
For the formation of a valid contract it is also necessary that the parties to an agreement must agree for a
lawful object. The object for which the agreement has been entered into must not be fraudulent or illegal or
immoral or opposed to public policy or must not imply injury to the person or property of another. If the
object is unlawful for one or the other of the reasons mentioned above the agreement is void.
Possibility of Performance
If the act is impossible in itself, physically or legally, if cannot be enforced at law. For example, Mr. An
agrees with B to discover treasure by magic. Such Agreements is not enforceable. Yet another essential
feature of a valid contract is that it must be capable of performance. Section 56 lays down that “An
agreement to do an act impossible in itself is void”. If the act is impossible in itself, physically or legally,
the agreement cannot be enforced at law. An agreement expressly declared to be void under the Contract
Act or under any other law, is not enforceable and is, thus, not a contract. The Contract Act declares void
certain types of agreements such as those in restraint of marriage, or trade, or legal proceedings as well as
wagering agreements.

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Not Declared to be void or Illegal
The agreement though satisfying all the conditions for a valid contract must not have been expressly
declared void by any law in force in the country. Agreements mentioned in Section 24 to 30 of the Act have
been expressly declared to be void for example agreements in restraint of trade, marriage, legal proceedings.
The terms of a contract must not be vague or uncertain. If an agreement is vague and its meaning cannot be
ascertained, it cannot be enforced. Also, the terms of a contract must be such as are capable of performance.
An agreement to do an impossible act is void and is not enforceable by law.
Legal Formalities
An oral Contract is a perfectly valid contract, expect in those cases where writing, registration etc. is
required by some statute. In India writing is required in cases of sale, mortgage, lease and gift of immovable
property, negotiable instruments; memorandum and articles of association of a company, etc. Registration
is required in cases of documents coming within the scope of the Registration Act. Generally, a contract
may be oral or in writing. However, certain contracts are required to be in writing and may even require
registration like for sale / transfer of immoveable properties. Therefore, where law requires an agreement
to be put in writing or be registered, the same must be complied with. For instance, the Indian Trusts Act
requires the creation of a trust to be reduced to writing.
use of contract
• Contract being the back bone of any business and corporate environment, everything hinges on
drafting a strong contract to be complied with by the parties.
• A contract helps people manage their relationships in a formal and legal way to avoid unnecessary
conflicts and loss business.
• It is therefore mandatory, that the contract is drafted appropriately and the time so spent makes
good business sense.
• Easy and simple language, clear and crisp clauses unambiguous provisions, lucid and logical
chronology makes for a viable contract.

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D 3.1
Attached in next page

Management principals and application for construction and the built environment
59
4.3 evaluate the impact of procurement techniques on the organization and
operation of construction firms and construction projects
Key Performance Indicators (KPI)
KPIs help us to measure how well companies, business units, projects or individuals are performing
compared to their strategic goals and objectives. Well-designed KPI provide the vital navigation
instruments that give us a clear understanding of current levels of performance.
Effective decision-makers and managers understand that they need information on the key dimensions of
performance and that this can be achieved by distilling them into the vital KPI.
In our organizations, the most effective KPIs are closely tied to strategic objectives and help to answer the
most critical business questions. A good starting point is therefore to identify the questions that the decision-
makers, managers or external stakeholders need to have an answer to. One or two so-called Key
Performance Questions should be identified for each strategic objective.
Once the most important business questions have been articulated it then allows companies to select or
develop the right KPIs that best help answer them. That way all KPI will be strategic, relevant and
meaningful.
Impact of procurement
• the client deals with only one firm, which enables improved coordination and
collaboration between designers and constructors;
• potential for time savings for the overall project as design and construction activities are
overlapped;
• works packages can be let competitively at prices that are current;
• under a design and manage form, the contractor assumes risk and responsibility for the
integration of the design with construction;
• improved constructability through constructor input into the design;
• roles, risks and responsibilities for all parties are clear; and
• Flexibility for changes in design.

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60
Site visit possible evidence
Figure 9

Management principals and application for construction and the built environment
61
Conclusion
Clear understanding of the roles and responsibilities of a manager. The confidence to develop and apply
your own skills in line with management best practice. A sound understanding how to manage the
construction activities, use of contracts , types of procurements, procurement techniques , elements of
contracts and example for elements and impact of procurement techniques in construction industry
Finally, I understood about Management principals and application for construction and the built
environment.

Management principals and application for construction and the built environment
62
List of references
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design in construction on project team performance. International Journal of Managing Projects in Business,
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Jctltd.co.uk, (2015). Design and Build.
Kelly, J., Male, S. and Graham, D. (2014). Value Management of Construction Projects. Hoboken: Wiley.
Latham, M. (1994). CONSTRUCTING THE TEAM. 1st ed.
Learnmanagement2.com, (2015). Flat organisational structure.
Ogunsanmi, O. (2013). Effects of Procurement Related Factors on Construction Project Performance in
Nigeria. Ethiop. J. Env Stud & Manag, 6(2).
Osipova, E. and Eriksson, P. (2011). The effects of cooperative procurement procedures on joint risk
management in Swedish construction projects. IJPOM, 3(3/4), p.209.
Plunkett, J. (2014). Plunkett's Real Estate & Construction Industry Almanac 2014. Houston: Plunkett
Research, Ltd.
Project-management-course.info, (2015). Matrix Organizational Structure - History and Styles
Rodriguez, J. (2014). Types of Construction Contracts.