“If history is our teacher then managers in the construction industry of today needs to reflect upon the evolution of management thought and practice and learn from this. ” Discuss this statement in the context of the historical development of management theories and their significance, if any, for the construction industry. Throughout the last century, management theories have been developed, adapted and changed over time. Management theories have been studied and used in all different organisations. Management is essential in the construction industry in delivering timely, well planned, quality jobs.
Management theories are important as they have helped managers develop leadership skills and information to achieve, good productivity and organisation in businesses. There are a number of published managerial approaches and some have developed as common practises. Below is the time line for published management thinking; Figure 1 – ‘the development of management thinking’- The practise of construction management, Barry Fryer. One of the first significant management theories recognised was the ‘Classical Approach’, In 1916 H. Fayol produced and explored this type of management theory, this was about the same time F. W.
Taylor also produced a similar theory. This theory is also known as scientific management. The basic of this theory is five main functions to be thought about and actioned in management. These basics are: plan, organise, command, co-ordinate and control. These are important factors found and used widely in the construction industry today in a manager’s role. Although these five basic principles are still looked at today in management as what managers should do, the classical approach was mainly focused on efficiency and the labour (work) of an organisation. Not much thought about the employees themselves was developed.
Organisation and management was not really focused on. ‘Taylor’ was more interested in the efficiency of working methods and developing a science for each operation an employee carried out. Therefore there was room to improve this management theory and the principles produced. This theory was then developed from the five basic principles a manager should carry out and what managers actually do. H. Mintzburg studied the role of the managers, and developed a ‘cycle of managerial roles’ which includes ‘decisional roles’, ‘interpersonal roles’ and ‘informational roles’.
The next major management theory which developed management thinking was the ‘Human Relations Approach’. This approach was developed and studied by E. Mayo, Maslow and Hertzberg. This approach was looking at people, and the groups of people working in an organisation. E. Mayo was one of the key figures involved in a study that looked at group relations and relationships between employees and management. This study was called ‘The Hawthorne Studies’. It involved 5 different stages and studies of employees and management in a company.
These studies were carried out from 1924 to 1936. The relationship between workers and management and the communication between them is essential in the Construction Industry, due to the way work is carried out. Normally work is gained by a main contractor and then they employ a number of subcontractors that carry out the works and obligations of the contract for them, under their supervision and management. Therefore communication and good relations are a must, or the work could be put at risk. There must be understanding, trust and reliability. When employing a
different number of subcontractors they all need to be controlled and managed. ‘The Hawthorne studies’ helped communication and employer/worker relations and from it managers recognised the importance to be aware that groups need to collaborate together with the organisation or they might work against it. Other group management studies have taken place like ‘The Asch Experiments’ (1951), ‘Mullins theory’ (2007), ‘Belbin’ (1993) and ‘Adair’ (1986). I feel all these relate to the construction industry. Much of the construction industry is about working together as a team to achieve a set objective.
Whether you are in a contractor’s project team or a subcontractor group carrying out a trade skill, the people in the group need to work together and the groups themselves need to interact and work together. Site managers may be leading specific groups but they are also part of a group. ‘Maslow’ developed a theory that looked at the needs of individual people and what gives them motivation. He developed a model of employees needs, the model shows basic low level needs, physiological needs and safety needs have to be met before higher level needs like self-fulfilment can be met.
In this hierarchical model, when a need is fulfilled it will no longer motivate an individual and the need in the above tier takes it place. Maslow’s hierarchy of needs is shown in the diagram below: These needs are necessities and can be applied in the construction industry and in most organisations. Employees need to be motivated day to day, in the construction industry this can be done by ensuring certain things. For employees’ physiological needs, providing good clean facilities on site like canteen and drying room, providing rest breaks and decent wages can meet this need.
To meet employees’ safety needs, a safe working environment needs to be provided, in construction this is making sure risk and method statements are correct for tasks. This also could mean good retirement benefits with the company. For social needs a sense of trust and community needs to be created within the company and between teams. Team social events and team building exercises can achieve this. Esteem needs in the construction industry could be making sure an employee is appreciated and valued. Managers should recognise when someone has done a good job.
Self actualization can be achieved by giving an employee more responsibility and chance of promotion so they can reach their career potential. The ‘Systems approach’ was next developed; this approach is the applying of systems thinking to organisations to make them more manageable. In this approach the organisation is not looked at as a whole but the links and relationships between the sub-divisions are looked at. All parts of a system are intertwined, this includes technical sub-systems which are the activities of a company, and the employees (social sub-system), as what they do affects the work of a company.
This can apply to the construction industry, the way the subcontractors are treated, there pay, attitudes and moral will affect the activities of the build of the project. The quantity or quality of work can be affected, and so will affect other activities to be completed and affect the overall timescale of the project. The system runs on an input/conversion process/output system. Inputs of information, materials and labour are turned in to outputs of a finished building. The ‘Contingency theory’ was the next theory in the development of management approaches.
It was developed by ‘Woodward’ and ‘Burns and Stalker’. It looks at the idea that every manager’s role is different depending on the situation there working in, but with a family of similar roles. Not one way of working is the best way to manage or run a company. This is true to managers working in different industries, i. e. , a site manager co-ordinating work between different subcontractors work and interfaces and a manager of a factory where workers are carrying out the same day to day tasks. They need to have different skills, approaches depending on their work, employees and size.
This also applies to construction managers, as from project to project they may have to change their style and method of doing things in relation to what is being built and what sort of project is being worked on. On different projects there will be different risks that need to be managed and different external factors affecting the manager’s role. This could be the client, competitors, environmental issues, government and local communities. This could mean the manager may have to take on additional tasks over and above the managerial roles and responsibilities that are consistent to every manager’s role.
The most recent approach to management theory has been the ‘Dynamic engagement approach’; this has been looked at by ‘Stoner et al’ in 1995 and ‘Hammer and Champy’ in 1994. This is looking at organisations and rethinking management as the company changes. The changes to the company may be caused by cultures and nations and the world changing and developing. Managers need to deal with new and changing relations and situations, they may need to take on new views and adjust with the ever changing environment. They need to reassess their management techniques and also the organisational structure.
This theory underlies from the contingency approach, but focuses on the extent, type and rate of change affecting companies and society. As society and competitors change, companies need be diverse and dynamic and change with the times. In the construction industry, this means systems constantly need to be adapted and changed all the time to the way business is conducted and tendered for. This also may mean a complete company turn around in times when the country has changed and economic climate has been affected. This could be looking at other things a company can offer and changing the company’s services and the objectives of the business.
As management approaches have changed through history, they have assisted organisations and companies around the world in surviving and adapting to world change. Management thinking has developed so much, and relates immensely to the construction industry. Management is a large part of the construction industry and good management is essential. It is needed to ensure a build is run smoothly; quality work is provided with little risk and is completed in time and in budget. Good management improves employees’ performance and so makes the business more successful.
It is through the work and efforts of the employees using management systems and procedures this can be achieved. It gives a set organisational structure which is needed in a business in order to achieve the business aims and objectives. We as Managers need to carry on learning from the past studies and the way management is changing; we need to carry on adapting managerial roles and learning from the way other businesses and societies run and the way other countries management systems work. Part B In the current economic climate, private development (i. e.
housing) is almost at a standstill. Discuss the six stages of the development process highlighting major points that you will have to consider as a developer for future development proposals to succeed in the development business. In today’s current economic climate house prices have taken a dramatic fall due to the country’s recession. This is partly due to what we know as the ‘credit crunch’ and the banks reluctance to now lend money. Therefore people can no longer afford to buy houses at the current time, or even afford to keep up mortgage repayments on already owned property.
Therefore the current market for private development had declined due to the less demand for housing. Private development is needed to satisfy demand and the needs of a specific area; also developments attract tourism to the UK, but also to keep builders and financers in business. To consider when will be the right time to think about building, developing of land there are six main stages to the development process that need to be looked at. The diagram below shows the six main factors to consider. The first main stage of the development process is ‘Analysis and property investment situation’.
This is looking at the current financial situation you may be in as a developer and at how the property market is looking and acting at the moment. An economic analysis is essential before deciding if it is the right time to develop, looking at the supply and demand for houses, changes in the environment and technology. Finance is a big factor and a part of the decision whether to develop. Profit will also be a main driving force. A detailed property market analysis and examination of future trends are major factors that need to be carried out.
A market analysis is important in showing if the property market will have a continuous growth. In the past the housing market has had a steady growth. Property values have not risen continuously; there have been times of no growth and times of extreme growth. To understand what could happen in the future to the property market, we need to understand demographics and the supply and demand of houses. For example; there was an oversupply of executive homes, where the demand was actually for one bed apartments, as more single people were looking to buy or couples that have no children.
This mistake was made by developers getting to greedy. Reasons that can affect the choice to develop can be greed or not to develop, fear of housing prices crashing. To understand the market a rational view needs to be taken, previous statistics need to be looked at. Supply and demand needs to be determined and the influences that can affect it, birth rate and the growth of childless households, household incomes, are just some. There must be a need in the chosen area for the development. The ‘decision to develop’ is the next process in the stages of development.
This includes feasibility studies, finding a site or an area to develop that in return can make a turnover. A feasibility study is important to carry out, to find an area with development potential and find out if there is profit to be made from the development. Town planners will need to be consulted to find out policies for the area and if there are any regulations that may affect the build of property in the area. There may be a development policy already set up stating what is required in the area and what is acceptable or not for the area.
Location is crucial and the right development in the right area will do well. But there are many external factors of an area, which may mean when your properties been built, you may not be able to sell or let it. The style and cost of a property will affect its marketing potential, and these will vary from area to area. Properties already in an area should be researched. Employment figures of an area will also affect if a property will sell quickly or not, if there is high unemployment figures in an area, the likely hood of the area being able to buy will be slim.
Who wants to buy or rent in an area needs to be established. If a property is built in an ‘up and coming’ area, there is more chance of it selling at a higher price and making a profit quickly. Research on and recognising if an area is becoming more popular must be carried out, to find an ‘up and coming’ area. ‘Obtaining planning permission’ will be the next step a developer would come to once a development outline has been achieved and there is proof the development will succeed in the area of need.
An outline application will be submitted to the planning authorities; they will look at the details of the development and then determine what impact it will have on the area and the local environment. This is vital and will potentially affect the outcome of the planning consent. A development in an area must not cause negative affects for the area. A check will also be made to make sure the potential site is not affecting any conservation polices, green belts, highway proposals.