2/24/2026
Chapter 2.
Project formation
DUY HUNG NGUYEN
UNIVERSITY OF TRANSPORT
HO CHI MINH CITY
Position: Lecturer
Field: Construction Management
Email: [Link]@[Link]
Agenda
Organization and Management
Delivery Methods in Construction
Project Management Forms
Stages of Construction Projects
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Organization and
Management
Organization and Management
Project organization
• There are many potential
combinations and structures
Structure
for projects.
• Function-based organizations,
Matrix-based organizations, Function Matrix Project
Project-based organizations
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Organization and Management
Function-based Organizations
Pros
• Resources are optimized
• Improved technical control
• Communication and procedures
established
• Job security for team members
Cons
• No one person is responsible
• Coordination is more complex
• No customer focal point
• Functional priorities govern project
priorities
• Project activities can easily get siloed
• Distributed budget and schedule
authority 5
Organization and Management
Matrix Based Organizations
Pros
• Some project coordination is provided
• Improved reporting
• Communication improved
• Resources optimized
• Job security for team members
Cons
• No one person is responsible
• Coordination is more complex
• No customer focal point
• Functional priorities govern over project
priorities
• Project activities can easily get siloed
• Distributed budget and schedule Weak Matrix
authority 6
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Organization and Management
Matrix Based Organizations
Pros
• Single point of responsibility identified
• Improved customer focus
• Improved communication among team
members
• Improved reporting
• Resource flexibility
• Job security for team members
Cons
• Unclear budget and schedule authority
• Potential conflicts between functional
managers and project managers
• Potential priority conflicts Balanced Matrix
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Organization and Management
Matrix Based Organizations
Pros
• Single point of responsibility
• Budget and schedule management is
clearer
• Reporting is improved
• Customer focus is improved
• Resource flexibility
• Job security for team members
Cons
• Dual reporting for team
• Resources not dedicated
• Potential conflicts between functional
managers and project managers
Strong Matrix
• Potential priority conflicts
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Organization and Management
Project Based Organizations
Pros
• Clear single point of responsibility
• Strong lines of authority
• Dedicated staff focused on project
• Flexibility in schedules and to changes
• Strongest customer focus
• Strongest reporting and control
Cons
• Resource use is less efficient
• Lower technical interchange among
projects
• Issues with reintegration of staff at
project conclusion
• Technical oversight of project is weaker
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Organization and Management
Organization structure VS Project Characteristics
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Organization and Management
Project oriented organization Project
• Team members work 100% for the project Manager’s
• Empowered project manager influence
• Organizationally recognized unit for a certain time Stronger
Matrix organization (Weak, balanced, strong)
• Balance between project manager and function
authority varies by project
• Project manager has tasking and budget authority
• Team members remain in their functional organizations
• Potential for conflicts
Functional organization
• Weakest form of project organization
• ‘Pure functional’ organization
• Project coordinator has no budget or taking authority Weaker
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Organization and Management
How to Select project organization?
Enterprise environmental factors
Important factors
Organizational • Size of the organization
culture,
Geographical
distribution of
Structure and
governance
• Size of the project
resources
Other factor • Duration
Corporate
• Uniqueness of the project
Project
knowledge
Government, • Complexity
base
industry and
corporate • Risk
standards
Infrastructure
Existing • Significance
human
resource • Cost
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Organization and Management
How to Select project organization?
Functional Organization Weak Matrix Organization
• Small organizations with • Small projects of limited duration
limited resources • Relatively simple scopes
• Simple projects • Projects with limited changes
• Small projects relative to previous projects
• Projects that are very similar • Projects of limited significance
to previous projects • Low risk, low cost
• Low cost/low risk • Low to moderate schedule
pressure
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Organization and Management
How to Select project organization?
Balanced Matrix Organization Strong Matrix Organization
• Projects with a moderate • Medium to large projects where
scope and duration resource efficiency is important
• Projects that are not too • Non-schedule driven projects
complex and the organization • Moderate duration projects
has experience with • Unique projects with limited
• Moderate cost, risk and challenges
limited schedule pressure • Projects where functional input
is important
• Manage risk projects
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Organization and Management
How to Select project organization?
Project oriented Organization
• Large projects in large organizations
• High risk ventures
• Complex projects requiring a lot of coordination
• Projects in a project focused organization
• Project which will have a major impact on the organization
• Challenging projects
• Schedule driven projects
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Functional Weak Matrix Balanced Strong Matrix Project
Matrix Oriented
Scope Small Small Medium Medium Large
Duration Short (<1 year) Short Medium Medium Long
Uniqueness Similar to Small changes Neutral Unique One of a kind
normal
business
Complexity Simple Simple with Medium Medium-High High
some
coordination
Ambitiousness Easy Success Achievable Challenging
Significance Low priority Low- Moderate Important Key
Moderation
Risk Small Moderate High
Cost Low or no Low budget Moderate Medium-High High
budget
Simultaneity Many Few Very few 16
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2.
Delivery Methods in
Construction
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Delivery Methods in Construction
Design – Bid – Build
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Delivery Methods in Construction
Pros
• Stakeholders are familiar with this method
• No legal barriers
• Owners know the total cost before carrying out construction
• Owners maintain a traditional relationship with designers
• "Can" get the contract with the best price
Cons
Design –
• Lack of information exchange between designers and contractors during the Bid –
design phase
• Lump-sum are often broken due to design errors and changes by owners
Build
• Bidding can only be approved when the design is completed
• Increased risk of disputes and lawsuits due to lack of cooperation.
• Owners must bear all design risks
• High design cost
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Delivery Methods in Construction
Construction Management at Risk
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Delivery Methods in Construction
Pros
• Contractors joined the project soon
• Contractors contribute quality to the design
• Contractors can estimate costs earlier and more accurately.
• Shorten project implementation time
• Owners retain the traditional relationship with designers
through a separate contract
Cons
• Contractors may participate at the wrong time. Construction
• The owners still manage 2 separate contracts for design and Management at
construction → the risk of conflict remains
• The owners still have to bear all design risks → responsible Risk
for the changes in the construction phase
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Delivery Methods in Construction
Design and Build
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Delivery Methods in Construction
Pros
•
•
Encourage collaboration and innovation
The contractor's decision is not based solely on price
Design
• Price and completion date are determined at the beginning of the project and Build
• The fastest method to complete a project.
• Less risk of cost changes during project implementation
• Owners only manage 1 contract
• The main risk will belong to contractors
Cons
• Not a traditional method, requires trust and cooperation to be successful.
• The project price is usually higher
• It is difficult for owners to determine specific costs.
• Time spent in the bidding and negotiation phase will be longer
• There are many problems with design and quality control
• The quality of the project is determined by the cost
• Not widely accepted and there are still legal hurdles 23
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Delivery Methods in Construction
Compare Delivery Methods
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3.
Project Management
Forms
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Project Management Forms
Construction Management
Owners
PM
Designers Contractors ….
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Project Management Forms
Turnkey
• Contractors will be responsible
for the entire project
• The final cost will be paid
when the contractor hands
over the building to the
customer
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Project Management Forms
Self-construction
Owners
Contractors Designers
Construction
Subcontractors
groups
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Project Management Forms
Multiple Prime Contract
Owners
Designers Contractor 1 Contractor 2
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Project Management Forms
• Build-operate-transfer (BOT)
• Build-transfer (BT) Public-Private
• Build-transfer-operate (BTO)
• Build-own-maintain (BOM) Partnerships (PPP)
• Build-own-operate (BOO)
• Build-develop-operate (BDO)
• Design-construct-manage-finance
(DCMF)
• Design-build-operate (DBO)
• Buy-build-operate (BBO)
• Lease-own-operate (LOO)
• Build-own-operate-transfer (BOOT)
• Build-rent-own-transfer (BROT)
• Build-lease-operate-transfer (BLOT)
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Project Management Forms
Lowest
change Lowest Why are there
level price many forms of
Maximize
control Shortest project
schedule
management?
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Project Management Forms
Select the form of project
management
• Owners' ability
• Project control level
• Owners' level of interest in projects
• Level of risk-sharing between
owners and contractors
• The impact level of time and cost
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4.
Stages of Construction
Projects
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Stages of Construction Projects
Stage of a Construction Project
Preparation of Implementation Ending of
Investment of Investment Investment Project
Project Project
• Pre-feasibility • Design stage • Handover and
research • Bidding stage operation
• Feasibility phase
• Construction
research stage
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Stages of Construction Projects
Stage of a Project
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Stages of Construction Projects
Stage of a Project
Defining Planning Executing Delivering
[Link] [Link] [Link] reports [Link] customer
[Link] [Link] [Link] [Link] documents
[Link] [Link] [Link] [Link] resources
[Link] [Link] [Link] [Link] staff
[Link] [Link] learned
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Stages of Construction Projects
Project stages and influences
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Thanks!
Any questions?
You can find me at:
[Link]@[Link]
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Diagrams and infographics
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