School of Civil and Environmental

Engineering

CENG 5104: CONSTRUCTION MANAGEMENT

Chapter 1
Introduction
 Contents

Introduction
1. Construction Industry

2. Domestic Construction Industry

3. Fundamentals of Management

2
 1. Construction Industry
1.1. General
 Construction: is a process of constructing something
by man for one purpose or another. It may be a road,
bridge, dam, dwelling place, an airport, commercial
building, etc.
 Construction types:
 Residential buildings;
 Institutional and commercial buildings;
 Specialized industrial construction; and
 Infrastructure and heavy construction.
 Construction Industry (CI) is an industry which is
involved in the planning, execution and evaluation of
all types of civil works.

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1. Construction Industry
1.1. General
 Project: is some form of human activity that has a
beginning, a productive phase and an end, creating
something that did not exist before.
 Construction Project: is an investment of scarce
resources with a definite objective, time horizon and
geographical boundary.
 Construction projects are mostly constructed on the
ground and exposed fully to the local environment.
 A construction project has different scale and
complexities. It ranges from improvements to large
investments. But, every project is:
 An investment of resources, and
 A cause of irreversible change.

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1. Construction Industry
1.1. General
 Common characteristics of construction projects:
 It has a specific starting and finishing time.
 It has usually geographical and sometimes
organizational boundary.
 It has clearly defined set of objectives.
 It entails the investment of scarce resources in the
expectation of future benefits.
 It may be planned, financed and implemented
as a unit.

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 1. Construction Industry
1.2. Study of Construction
 Study of Construction mainly covers two themes:
1. Construction Technology: Relates to methods and
techniques used to place the physical materials and
elements of construction at the Job site.
2. Construction Management: Addresses how available
resources will be applied.
Money Manpower

Materials Machines

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 1. Construction Industry
1.2. Study of Construction
 Many great construction
projects mark significant
milestones in human history:
1. Great Pyramids;
2. Brooklyn Bridge;
3. Panama Canal; &
4. Euro/channel tunnel.

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1. Construction Industry

1.3. Construction Industry Category

 Construction Industry can be categorized into
three major sectors:
i. Transport and Communication Sector - Road,
Railway, Airway, and Telecommunication related
physical works;
ii. Water and Energy Works – Hydropower
development, transmission lines, wind power,
irrigation projects; and
iii. Buildings and Other Physical Infrastructures.
 CI is among the leading industry in producing
employment and contribute to the over all
national development.

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 1. Construction Industry
1.3. Construction Industry Category

Transportation Infrastructure
The Construction Energy supply
Industry

Urban development Water supply

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 1. Construction Industry
1.4. Construction Industry Attributes
1.4.1 Nature of Construction Industry:
 Requires big capital investment thus is highly
affected by the economy of the nation.
 Consumes much of the national budget in
developing countries like Ethiopia.
World Total 3.41 Trillion $ 1. US $819 B (8.2%)

Asia 1,113 Billion $ 2. Japan $618 B (13.9%)

Europe 1,017 Billion $ 3. Germany $253 B (11.4%)

North America 885 Billion $ 4. China $181 B (17.0%)

Latin America 241 Billion $ 5. UK $109 B (7.7%)

Middle East 101 Billion $ Ethiopia $ 402 M(59.8%)

Africa 56 Billion $
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1. Construction Industry
1.4. Construction Industry Attributes
1.4.1 Nature of Construction Industry:
A. Nature of production: mainly on site.
 Changing supply-chain relationship and
production site.
 Exposed to extreme weather condition.
 Seasonal disruption.
 Health and safety concerns.

B. Nature of product
 Large, heavy, durable, expensive,
heterogeneous, and immobile.

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 1. Construction Industry
1.4. Construction Industry Attributes
1.4.1 Nature of Construction Industry:
C. Demand for the product
 Demand is usually driven by ‘other’ goods and
services; not controlled by industry,
 In the majority of cases, clients define requirements
before the industry provides it,
 Time lags between demand and supply is long.

D. The Workforce
 The industry is, by its very nature, an overwhelmingly
domestic and labor-intensive industry despite the
advancement in modern technologies.
 Construction is a team output and requires
motivated and skilled workers.

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 1. Construction Industry
1.4. Construction Industry Attributes
1.4.2 Uniqueness of Construction Industry:
 Fragmented industry;
Sequential process

Need Design Bid Build

Client A/E Client Contractor

Fragmented project participants

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 1. Construction Industry
1.4. Construction Industry Attributes
1.4.2 Uniqueness of Construction Industry:
 Long production cycle;

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 1. Construction Industry
1.4. Construction Industry Attributes
1.4.2 Uniqueness of Construction Industry:
 Large uncertainty;
 Temporary organization nature;
 Unpredictable work load; and
 Subject to environmental impact.

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1. Construction Industry
1.5. Roles of Construction Industry
 Construction Industry is the most important
enabler for social, economic and political
development of countries.
 It provides the basis upon which other sectors
can grow by constructing the physical facilities
required for the production and distribution of
goods and services.
 Specifically this fact is true for least developing
countries like Ethiopia because projects are:
 Inter-sectoral;
 Source of employment; and
 Demands huge capital budget.

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1. Construction Industry
1.6. Construction Project Lifecycle
 The project life cycle of a construction project may be viewed as
a process through which a project is implemented from cradle to
grave (vital)

Market demand Definition of project

or perceived objectives and scope
needs

Disposal of Conceptual
Facility planning and
feasibility study
Fulfillment of
useful life Conceptual plan or
preliminary design
Operation and Design and
maintenance engineering

Acceptance Plans and

Start up for Procurement
of facility occupancy and specifications
construction
Completion of
construction
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 1. Construction Industry
1.7. Stakeholders of Construction sector
 Stakeholders of Construction sector:
 Construction Industry involves many people,
organization, agencies, ministries, designers,
contractors, project managers, equipment suppliers,
material suppliers, testing Laboratories, etc.

Architect
Owner
Subs

Contractor Suppliers

Vendors
Engineer (sellers)
Public

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 1. Construction Industry
1.7. Stakeholders of Construction sector
 Contractual stakeholders:
 Employer/Client,
 Consultant/Engineer, and
 Contractor.
 Non-contractual stakeholders:
 Public agencies: Statutory Agencies (EEPCo,
AAWSA, Fire Authority), Public authorities and
Municipalities (land and building permit),
 Suppliers, and
 End users etc.

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 1. Construction Industry
1.7. Stakeholders of Construction Sector
1.7.1 Employer/client
 Employer/Client is the initiator and owner of the
project (it can be public or private client).
 The client is the most important party who is active
from inception to completion and event to post-
occupancy maintenance.
 Duties of the client encompass the following:
 Availability and cost of land,
 Location & accessibility
 Required Infrastructure
 Legal constraints
 Current & future development
 Soil characteristics of land
 Site preparation (right of way)
 Permits
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 1. Construction Industry
1.7. Stakeholders of Construction Sector
1.7.2 Consultant
 The main role of the consultant is to interpret the
client’s project requirement into a specific design and
possibly the supervision.
 The consultants’ team shall:
 Ascertain(understand), interpret and formulate the
client’s requirement into an understandable project.
 Design the project to much requirements and constraints
(imposed by statutory obligations, technical feasibility,
environmental factors, site conditions, cost, etc)
 Assess client’s cost limit to decide on materials & the like.
 Prepare contract documents.
 Supervise the project and constantly inform the client on
the progress
 Approve payments
 Resolve contractual disputes
 Issue provisional and final acceptance certification
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1. Construction Industry
1.7. Stakeholders of Construction Sector
1.7.3 Contractor
 These are groups established mainly as
commercial companies, that contract to
construct development projects.
 Responsibility of contractors:
 Carry out a full site investigation prior to submission
of tender,
 Submit tender,
 Plan, Program, Control the construction process.
 Notify the consultant about delays, discrepancies,
 Effect all payments to his employees, suppliers,
subcontractors,
 Rectify all defects on completion of works, etc
 Provide post occupancy repair and maintenance if
required. 22
 1. Construction Industry
1.8. Resources for Construction Industry
 The following resources are vital that make up an
integral components for construction industry:
 Human Resources (Labor or Workmen);
 Financial Resources ( Fund);
 Information Resources;
 Physical Resources ( Materials, Equipment and
Other Assets); and
 Services and Management.

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 2. Domestic Construction Industry

2.1. Domestic Construction Industry: Historical Aspect

 Previous monarchies had contributed to the

development of construction in Ethiopia.
 Historic chronicles of the 17th and 18th centuries
showed that there were a number of small roads,
palaces and river improvement works.
 Among the Emperors Atse Fasil, Atse Tewodros and
Atse Menilik were noted for their major contributions.

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2. Domestic Construction Industry
2.1. Domestic Construction Industry: Historical Aspect

 Modern construction however had started during

the reign of Emperor Menilik II (The road from Addis
Ababa to Asmara).
 Italy during its invasion (1936-1941) had also
contributed to the development of the
construction industry. It had constructed about
6000km of roads.
 After Italian invasion, the first Ministry called
“Ministry of Communication and Public Works’’
was established during the Imperial regime.

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2. Domestic Construction Industry
2.1. Domestic Construction Industry: Historical
Aspect
 The construction development can be
reviewed into six distinct periods based on
the historical paradigm shifts in the
construction industry in Ethiopia:
i. Pre 1968: Foreign Companies dominated
construction Industry.
ii. 1968-1982: Emergence of Small scale Domestic
construction companies,
iii. 1982-1987: Parastatal companies dominated
Construction Industry,
iv. 1987-1991: Fragmentation between Design services
& Construction works,
v. 1991-2001: Parastatal Domination legally abolished,
and re-emergence of private construction
companies,
vi. 2001- to date: Integration and Capacity Building.
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 2. Domestic Construction Industry
2.2. Current Status of Local Construction Industry
 Current status of the construction industry is
distinguished by:
 Lack of clear developmental objectives for the
industry;
 Inadequate co-ordination of planning between the
industry and infrastructure programs in the various
sectors of the economy;
 Heavy dependence on foreign resources such as
materials, equipment and expertise, which continue
to be supplied to a major extent by foreign
consultants and contractors;
 Transport bottlenecks to the distribution of
construction materials and equipment;
 Inadequate relevant local construction regulations
and standards;
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 2. Domestic Construction Industry
2.2. Current Status of Local Construction Industry
 Current status of the construction industry is distinguished by:

 Control of the construction sector by small-to-medium

sized firms and parastatal construction enterprises
operating at low levels of capacity and with inadequate
working capital;

 Inadequate and ineffective organizations representing the

interests of contractors, consultants and engineers;

 Inadequate numbers of suitably qualified and

experienced personnel, at all levels: engineers,
technicians, mechanics, operators and foremen etc.;

 Inadequate consideration given to the use of local

resources (including community participation in labor-
based works);

 Little consideration given to the concept or cost of

maintenance as a component of investment costs. 28
2. Domestic Construction Industry
2.2. Current Status of Local Construction Industry
 The general state of the domestic construction
industry in Ethiopia is characterized by the
following five major deficiencies:

 An inadequate capital base;

 Old and limited numbers of equipment;
 Low levels of equipment availability and
utilization;
 Deficiencies in technical, managerial,
financial and entrepreneurial skills; and
 Insufficient and ineffective use of labor-based
construction and maintenance technology.

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 2. Domestic Construction Industry

2.3. Challenges of Domestic Construction Industry

 Some of the major challenges faced in the

Ethiopian construction industry are:

 Lack of equipment and material;

 Obstacles posed by government regulations;
 Scarcity of finance;
 Big projects off-limits to domestic firms;
 Inefficient custom and clearance(allowance);
 Lack of skilled labor; and
 Construction project delays:- Delays are common
to construction projects in Ethiopia.
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 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.1 Road Construction
 The Road Sector Development Plan (RSDP) has
been implemented over a period of thirteen
years and in three separate phases, as follows:
 RSDP I – Period from July 1997 to June 2002 (5 year plan);
 RSDP II – Period July 2002 to June 2007 (5 year plan); and
 RSDP III – Period July 2007 to June 2010 (3 year plan).

Phases of the Program Financial (in Million % Physical ( in km) %

ETB)

Budget Disb. Plan Acco.

RSDP I (Five Years ) 9812.9 7284.5 74 8908 8709 98
RSDP II (Five Years) 15985.8 18112.8 113 8486 12006 142
RSDP III (Three Years) 34643.9 34957.8 101 20686 19250 93
Total RSDP (Thirteen Years ) 60442.6 60355.1 100 38080 39965 105
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2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.1 Road Construction
 RSDP IV is prepared as part of Governments’
overall Growth and Transformation Plan.
 Implementation of RSDP IV is major strategic pillar
of the Growth and Transformation Plan.
 RSDP IV consists of:
 Rehabilitation of 728Km of trunk roads;
 Upgrading of 5,023Km of trunk and link roads;
 Construction of 4,331Km of new link roads;
 Heavy maintenance of 4,700Km of paved and gravel
roads; and
 Routine maintenance of 84,649Km of road network.
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 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.1 Road Construction
 The program also consists of the following regional
and Wereda road components through Universal
Road Access Program, URAP.
 Construction of 11,212Km of new rural roads
through the RRAs; and
 Construction of 71,523Km of Wereda roads
through the Wereda road offices.
 Cost Estimate:
 The total cost of implementing RSDP IV is
estimated to be ETB 125,276.7 million.

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2. Domestic Construction Industry

2.4. Recent Trends and Future Prospects

2.4.2 Railway Construction
 Ethiopian Railway Corporation, ERC is presently
managing a 5,000Km proposed National Railway
Network study and the Addis Ababa Light Rail Transit
(AALRT) Project.
A. Addis Ababa Light Rail transit Project (AA LRT):
 The 1st Phase of the LRT project comprises an East-
West line from Ayat to Torhailoch (17.35Km) and a
North-South line from Menelik II Sq. to Kality (16.90
Km).
 The Total Length of Phase I will be 34.25Km.
 Cost: USD 3 milion per Kilometre.

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 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.2 Railway Construction
A. Addis Ababa Light Rail transit Project (AA LRT):

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G.

35
2. Domestic Construction Industry

2.4. Recent Trends and Future Prospects

2.4.2 Railway Construction
B. Federal Railway Projects
 Ethiopia has launched the construction of a 5,000Km
railway complex which aims to link the capital, Addis
Ababa, to various regions of the country.
 According to the GTP 2,000Km of the total will be
constructed in the next five years.
 The first phase of construction will be the construction
of five railway tracks, which will create job
opportunities for over 300,000 citizens nationwide,
and will cost the nation an estimated 6 billion Birr
(US$336 million) annually.

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 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.2 Railway Construction
B. Federal Railway Projects
Project Route Via Distance
Phase (Km)

Phase I Route 1 Addis Ababa (Sebeta)_Mojo_Awash_Dire Dewa_ 656

Djibouti

Part of Route 3 Addis Ababa(Sebeta)_Ejaji_Seka_Bedele 366

Part of Route 6 Weldia_Mile_Djibouti_Railway 256

Part of Route 5 Awash_Kombolcha_Mekele 556.2

Phase II Route 4 Ejaji_Nekemt_Asossa_Kurmuk 460

Route 2 Mojo_Shashemene_Konso_Woyito_ Konso_ Moyale 905

Route 7 Wereta_Azezo_Metema 244

Part of Route 5 Mekele_Shire 201.2

Part of Route 6 Fnoteselam_Bahirdar_Wereta_Weldia 461

Route 8 Adama_Indeto_Gasera 248

Extension Extension to Sudan Via Boma (not part of the project) 37 115
 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.2 Railway Construction
B. Federal Railway Projects

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G.

38
2. Domestic Construction Industry

2.4. Recent Trends and Future Prospects

2.4.3 Hydropower Development

 Ethiopia has a vast hydropower potential, which is

estimated to be about 45,000 MW.
 Even though Ethiopia considers itself the
Powerhouse of Africa, so far very little percentage
(less than 5%) of the vast potential has been
harnessed.
 In 2009 less than 10% of Ethiopians had access to
electricity and the country was plagued by power
outages.

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 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.3 Hydropower Development
Name Installed Commissio Basin Contractor Financing Cost
Capacity ning
Fincha 134 MW 1973 Fincha (Blue Nile)
Gilgel Gibe I 180 MW 2004 Omo river Salini (bid) World Bank $331m
Tekeze 300 MW 2009 Tekeze (Atbara) Sinohydro Chinese $365m
Corporation (bid)
Beles 460 MW 2010 Lake Tana (Blue Nile) Salini (no bid) Ethiopian
government
Gilgel Gibe II 420 MW 2010 Omo River (no dam, Salini (no bid) Italy and EIB Euro 370m
fed by GG I)
Gilgel Gibe III 1870 MW 2012-13 Omo river Salini (no bid) Italy Euro 1.55bn

Fincha Amerti 100 MW 2013 Fincha (Blue nile) China (CGGC) Exim Bank of $276m
Nesse (FAN) China
Halele Worabese 440 MW 2014 Omo river Sinohydro FairFund? Euro 470m
Corporation
Gilgel Gibe IV 2000 MW 2014 Tributary of the Omo Sinohydro Chinese $1.9bn
River Corporation
Chemoga Yeda 278 MW 2013 tributary of the Blue Sinohydro Chinese $555m
Nile, near Debre Corporation
Markos

Genale Dawa III 256 MW Awarded between Oromo Chineese

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G.
Chinese $408m
in 2009 and Somali state (CGGC) 40
 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.3 Hydropower Development
Possible interconnection with neighboring countries

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G.

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2. Domestic Construction Industry

2.4. Recent Trends and Future Prospects

2.4.4 Wind Power Development

 EEPCo has decided to use wind power for the several

advantages that it posses:
 Being renewable;
 Being reliable and affordable;
 Being complementary to hydropower plants: rainy
season – low wind; dry season – high wind potential;
and
 combining wind and hydro adds value to the hydro
plant, i.e. longer operation time, also at the end of
dry season (water saving through wind).

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 2. Domestic Construction Industry

2.4. Recent Trends and Future Prospects

2.4.4 Wind Power Development
S. No. Name of the project Electric power Year of
generation capacity completion
in MW

1 Ashengoda Wind Power Project 120 (€210 million ) 2012

2 Adama Wind Power Project 51 ($117 million) 2011

3 Adama II Wind Power Project 51 2013

4 Assela Wind Power Project 100 2013
5 Ayisha Wind Power Project 300 2012
6 Debre Birhan Wind Power 400 2013
Project
7 Messobo Wind Power Project 42 2012
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 2. Domestic Construction Industry
2.4. Recent Trends and Future Prospects
2.4.4 Wind Power Development
Four major search areas for wind power

AAU, AAiT, Construction Management, Lecture Notes, March 2014, Getaneh G.

44
2. Domestic Construction Industry

2.4. Recent Trends and Future Prospects

2.4.5 Irrigation Projects

2.4.6 Housing development projects
2.4.7 University Capacity Building Projects, UCBP
2.4.8 Sugar Factory Projects
2.4.9 Fertilizer Factory Projects

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3. Fundamentals of Management
3.1. Management: Definition
 A means of achieving political, economic, and social
objectives.
 A means of integrating resources (materials, finance,
human resources, information, etc.,) in order to
achieve organizational objectives efficiently and
effectively.
 A means of getting things done through people in
order to achieve objectives.
 A process of establishing vision, mission, values,
objectives, goals, and strategies and communicating
these, and guiding and empowering others to
accomplish them.
 A process of planning, organizing, directing and
controlling of organizational activities in order to
achieve objectives.
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3. Fundamentals of Management

3.2. Management Functions

 Management is a set of goal-directed, interrelated

and interdependent activities, aimed at
accomplishing organizational goals in an efficient and
effective manner.
 Generally, management functions encompass:
planning, organizing, leading and controlling.

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 3. Fundamentals of Management
Management Function inputs and outputs

Management sets direction

Planning
Performance
Resources
•Human •Attain goals

•Financial •Products
Controlling Organizing
•Raw Materials •Services

•Technological •Efficiency

•Information •Effectiveness

Leading
Inputs Outputs

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 3. Fundamentals of Management

3.2. Management Functions

 Planning: devising a systematic approach for attaining
the goals of the organization.
 Organizing: determining how activities and resources
are grouped and the composition of work groups and
the way in which work and activities are to be
coordinated.
 Leading: guiding, leading and overseeing of
employees to achieve organizational goals.
 Controlling: establishing performance standards and
comparing results and expectations to make
appropriate changes.

49
3. Fundamentals of Management

3.2. Management Functions

Planning Organizing

Management
Functions

Controlling Leading

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 3. Fundamentals of Management

3.2. Management Functions

3.2.1 Planning
 Management starts with planning. Without a plan
organizations will never succeed. If they do, it will have
been by luck or chance and is not repeatable. Plan,
will help us in:
 What to accomplish (goals);
 When to accomplish the goals;
 What resources to use;
 Who should accomplish what;
 Where to accomplish; and
 What methods to use.
 Assess all possible scenarios including the best and
worst and what actions to take.

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 3. Fundamentals of Management

3.2. Management Functions

3.2.2 Organizing
 Organizing refers to the process of designing jobs
and departments and determining authority
relationships in organizations.
 Organizing:
 Permits people to work together in order to
achieve goals;
 Helps to achieve synergy (interaction);
 Avoid duplication of resources;
 Establish authority ; and
 And facilitate communication.

52
3. Fundamentals of Management

3.2. Management Functions

3.2.2 Organizing
 Some issues in organizing include:

 Specialization (division of labor);

 Grouping jobs into departments and
structuring (functional, product, customer,
geographic);
 Determining authority relationships (span of
control, chain of command);
 Delegation of authority; and
 Centralization and decentralization.

53
3. Fundamentals of Management

3.2. Management Functions

3.2.3 Leading
 Influencing, inspiring and empowering
employees to work towards the leaders vision.

 Leading involves:
 Building successful groups and teams in
organizations;
 Motivating people;
 Communication; and
 Developing organizational change.

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3. Fundamentals of Management

3.2. Management Functions

3.2.4 Controlling
 The process of measuring performance,
comparing it with the objectives, and making
any necessary adjustments.

 The purpose of control include:

 Adapting to changes;
 Minimizing consequences of errors;
 Helping the organization cope with
complexities; and
 Improving efficiency.

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3. Fundamentals of Management

3.2. Management Functions

3.2.4 Controlling
A. Control Purpose
 The control function, in turn, has four basic purposes.

56
3. Fundamentals of Management

3.2. Management Functions

3.2.4 Controlling
B. Control Process

57
 3. Fundamentals of Management
3.3. Levels of Management
Manager: Definition
 The people looking beyond
themselves and exercising formal
authority over the activities and
performance of other people in
pursuit of organizational goals.
 Someone whose primary
responsibility is to carry out the
management process.
 Someone who plans and makes
decisions, organizes, leads, and
controls human, financial,
physical, and information
resources.
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3. Fundamentals of Management
3.3. Levels of Management
A. Top Managers
 The relatively small group of executives who manage
the organization’s overall goals, strategy, and
operating policies.
B. Middle Managers
 Largest group of managers in organizations who are
primarily responsible for implementing the policies and
plans of top managers. They supervise and
coordinate the activities of lower-level managers.
C. First-Line Managers
 Managers who supervise and coordinate the
activities of operating employees.

59
3. Fundamentals of Management
3.3. Levels of Management
Levels of Management

Top managers

Middle managers

First-line managers

Areas of Management

60
3. Fundamentals of Management
3.3. Levels of Management
Make decision about the
overall direction and
performance of the
organization

Translate the over all

direction and
performance into specific
objectives and plans

Implement
directions and plans
through production
and delivery of
services

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 3. Fundamentals of Management

3.4. Managerial skills

 Conceptual skills: the capacity to think in the abstract
and to see the organization as a complete unit and to
integrate and give direction to its diverse activities so
that objectives are achieved.
 Interpersonal skills: the ability to communicate with,
understand and motivate both individuals and groups.
 Technical skills: skills necessary to accomplish or
understand the specific kind of work being done in an
organization.

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3. Fundamentals of Management
3.4. Managerial skills
Conceptual Skills
Intellectual ability to process information and make
accurate decision about the work, group, and the job

Interpersonal Skills
Management Skills
Communication , conflict resolution,
leading

Technical Skills
Knowledge and ability to accomplish the specialized
activities of the work group
Top Level Middle Level Lower Level
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 3. Fundamentals of Management
3.5. Construction Management
 The management of construction is an enterprise
that involves many people with diverse interests,
talents and backgrounds. The owner, design
professional and contractor comprise the primary
triad of parties,
 However, others such as subcontractors, material
suppliers, bankers, insurance and bonding
companies, attorneys(lawyers) and public agency
officials, are vital elements of the project team
whose interrelated roles must be coordinated to
assure a successful project.

64
 3. Fundamentals of Management
3.5. Construction Management
 The function of project management for
construction include:
 Specification of project objectives and plans
including delineation of scope, budgeting,
scheduling, setting performance requirements, and
selecting project participants.
 Maximization of efficient resource utilization through
procurement of labor, materials and equipment
according to the prescribed schedule and plan.
 Implementation of various operations through proper
coordination and control of planning, design,
estimating, contracting and construction in the entire
process.
 Development of effective communications and
mechanisms for resolving conflicts among the various
participants. 65
 3. Fundamentals of Management

3.6. Organization Management

A. Organization
 A consciously coordinated social unit, composed of
two or more people influencing each other that
functions on a relatively continuous basis to achieve
a common goal or set of goals.
 It is a structured process in which people interact
and influence each other in order to achieve
objectives.
B. Components of Origination
 People,
 Influence ,
 Goals or Purpose,
 Structure, and
 Technology.

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 3. Fundamentals of Management
3.6. Organization Management
C. Organization Environment
Macro or Far Environment

Near or Operating
Environment Economic
Technologic
Factors
al Factors Partners
Customers

Clients ORGANIZATION

Suppliers Political
Social Competitors Factors
Factors

67
 3. Fundamentals of Management
3.7. Organizational Structure
 Organizational structures can fall into either
mechanistic or organic forms.
 Mechanistic organizations are rather rigid in that they
comprise distinctly delineated jobs, clearly defined
hierarchical structure and are driven primarily by top-
down command and control. Mechanistic
organizations are tall structures, consisting of
hierarchies with several layers of management levels.
 Organic structures are is relatively flexible. They are
structurally decentralized, empowering employees at
all levels of the organization to take personal
responsibility for the processes and activities in which
they are engaged.

68
3. Fundamentals of Management
3.7. Organizational Structure
 Organizational design is creating an appropriate
organizational structure that will enable the
organization to accomplish its goals.
 The organization can choose from among
functional, divisional or matrix designs, whichever is
appropriate.
 It is the process of arranging, allocating work
authority and resources to achieve organization
goals.
 It involves:
 Identifying tasks to be performed;
 Allocating the tasks among members; and
 Integrating efforts to achieve its objectives.

69
3. Fundamentals of Management
3.7. Organizational Structure
Key Concepts
 Span of Management Control: The number of
subordinates reporting directly to a given manger;
 Chain of Command: The plan that specifies who
reports to whom in an organization, such reporting
lines are prominent features of organization chart;
 Coordination: The integration of the activities of the
separates parts of an organization to accomplish
organizational goals; and
 Downsizing: A version of organizational restructuring
which results in decreasing the size of the
organization and often results in a flatter
organizational structure.

70
3. Fundamentals of Management
3.7. Organization Structure
3.7.1. Functional Organization
 In a functional organization, tasks or jobs of similar
nature are grouped together and structured as a
unit. Each unit is staffed by functional specialists.
 Structuring the organization along the functional
lines facilitates good coordination and makes
supervision of the unit easy for managers as they
only need to be familiar with a narrow set of skills.

General
Manager

Marketing Production HR Mgr.

Finance Mgr.
Mgr. Mgr.

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 3. Fundamentals of Management
3.7. Organization Structure
3.7.2. Divisional Organization
 Divisional structures are grouped according to
workflow and structures are made up of
independent strategic organizational units.
 The workflow can be broken into product lines,
geographic regions, etc.

GM (Head Quarter)
(A.A)

DGM (Awasa) DGM (Mekelle) DGM (Bahir Dar) DGM (Jimma)

72
3. Fundamentals of Management
3.7. Organization Structure
3.7.3. Matrix Organization
 In matrix organization, individuals are made
responsible both to their line manager and the
project manager involved.
 The matrix concept facilitates working on
concurrent projects by creating a dual chain of
command, the project (program, systems, or
product) manager and the functional manager.
 Matrix structures utilize functional and divisional
chains of command simultaneously in the same part
of the organization, commonly for one-of-a-kind
projects.

73
 3. Fundamentals of Management
3.7. Organization Structure
3.7.3. Matrix Organization

Head Quarter

Material
Human
Production Finance Marketing &
Resource
Procurement

Marketing HR
Project A Production Finance Materials
Grp Grp
Manager Grp Grp Grp

Production Finance Marketing Materials

Project B HR
Grp Grp Grp Grp
Manager Grp

74
THANK YOU!

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