Project Management in Construction Project Management in Construction Sixth Edition Anthony Walker BBS, MSc, PhD, FRICS Emeritus Professor of Real Estate and Construction University of Hong Kong This edition first published 2015 © 2015 by John Wiley & Sons, Ltd © 1984, 1989, 1996, 2002, 2007 by Anthony Walker Registered Office John Wiley & Sons, Ltd., The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom Editorial Offices 9600 Garsington Road, Oxford, OX4 2DQ, United Kingdom The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ, United Kingdom For details of our global editorial offices, for customer services and for information about how to apply for permission to reuse the copyright material in this book please see our website at www.wiley.com/wiley-blackwell The right of the author to be identified as the author of this work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by the UK Copyright, Designs and Patents Act 1988, without the prior permission of the publisher Designations used by companies to distinguish their products are often claimed as trademarks All brand names and product names used in this book are trade names, service marks, trademarks or registered trademarks of their respective owners The publisher is not associated with any product or vendor mentioned in this book Limit of Liability/Disclaimer of Warranty: While the publisher and author(s) have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose It is sold on the understanding that the publisher is not engaged in rendering professional services and neither the publisher nor the author shall be liable for damages arising herefrom If professional advice or other expert assistance is required, the services of a competent professional should be sought Library of Congress Cataloging-in-Publication Data Walker, Anthony, 1939– Project management in construction / Anthony Walker – 6th edition pages cm Includes bibliographical references and index ISBN 978-1-118-50040-8 (pbk.) 1. Construction industry–Management. 2. Project management. I. Title HD9715.A2W27 2015 624.068′4–dc23 2014045947 A catalogue record for this book is available from the British Library Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books Cover Image by (building) iStockphoto © PPAMPicture (background) iStockphoto © Godruma Set in 10/12pt Minion by SPi Publisher Services, Pondicherry, India 1 2015 Contents Prefaceviii Introduction1 1.1 Introduction1 1.2 Evolution of Project Organisation 1.3 Management and Organisation 1.4 Definition of Construction Project Management 11 1.5 Objectives and Decisions 12 1.6 The Project Management Process and the Project Manager 12 1.7 Projects, Firms and Clients 14 1.8 The Contribution of Organisation Structure 18 1.9 Organisation Theory and Project Organisations 22 1.10 Relevance of Systems Theory 23 Organisation and the Construction Process 26 2.1 Introduction26 2.2 The Classical Approach 27 2.3 The Behavioural Approach 30 2.4 The Socio-Technical Approach 32 2.5 The Systems Approach 33 2.6 Reconciling Diverse Approaches 42 2.7 Criticisms of the Systems Approach 44 2.8 Configuration Theory 45 2.9 Mintzberg’s Classification 46 2.10 Chaos and Complexity Theory 52 2.11 Postmodernism56 2.12 Critical Theory 57 2.13 The Transaction Cost Approach 58 2.14 Many Paradigms 65 2.15 The Relevance of Temporary Organisations Generally to Construction Project Management 65 2.16 Virtual Organisation 68 2.17 Projects, Firms and Process 70 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Systems Thinking and Construction Project Organisation 72 Introduction72 Systems Concepts 76 Action of Environmental Forces 89 Negative Entropy, Adaption and Protected Environments 97 Growth, Differentiation, Interdependency and Integration 99 Feedback101 Systems and Hierarchies 102 v vi Contents 3.8 Increasing Challenges 104 3.9 Summary105 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 Clients and Stakeholders 107 Introduction107 Classification of Clients 114 Clients’ Objectives 120 Relationship of the Client’s Organisation and the Construction Process 123 Conflicting Objectives 126 Project Change 127 Role of the Client 128 Clients, Stakeholders and Sustainability 130 Practical Client Issues 132 The Project Team 139 5.1 Introduction139 5.2 Firms and Project Teams 139 5.3 Relationship with the Client 144 5.4 Differentiation, Interdependency and Integration 145 5.5 Decisions and Their Effect on Structure 153 5.6 Differentiation and Integration in Practice 154 5.7 Organisational Culture 158 5.8 Partnering163 5.9 Supply Chain Management 171 5.10 Trust Between Construction Organisations Generally 175 A Model of the Construction Process 178 6.1 Introduction178 6.2 Common Characteristics 178 6.3 Subsystems184 6.4 The Operating System and the Managing System 190 6.5 The Functions of the Managing System 191 6.6 Pattern of Managing System Functions 197 6.7 Project Management Activities 199 6.8 Project Management Skills 204 6.9 Some Practical Considerations 205 6.10 Design of Organisation Structures 207 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9 Authority, Power and Politics 209 Introduction209 Authority209 Power212 Relationship Between Authority and Power 212 The Sources of Power 213 Power and Interdependency 215 Politics in Organisations 215 Power and Leadership 218 Empowerment and Control 218 Contents vii 7.10 Power in Project Management 7.11 Politics, Projects and Firms 7.12 Empowerment and Projects 7.13 Project Managers and Power 8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 221 226 227 229 Project Leadership 230 Introduction230 Leadership231 Some Research Models 232 Leadership Style 237 Transactional and Transformational Leadership 238 Leadership and the Project Manager 239 Project managers’ Perceptions 243 Leadership Qualities 245 Organisation Structures 248 9.1 Introduction248 9.2 Project Management Theory and Transaction Cost Economics 249 9.3 The Components of Project Organisation Structures 257 9.4 Client/Project Team Integration 258 9.5 Design Team Organisation 259 9.6 Integration of the Construction Team 264 9.7 An Illustration of a Transaction Cost Explanation 275 9.8 Organisation Matrix 276 9.9 Public–Private Partnerships 288 9.10 Programme Management 291 10 Analysis and Design of Project Management Structures 295 10.1 Need for Analysis and Design 295 10.2 Criteria296 10.3 Linear Responsibility Analysis and Other Techniques 296 10.4 Application of Linear Responsibility Analysis 297 10.5 Project Outcome 309 10.6 Presentation of Project Organisations 313 References315 Index336 Preface As the sixth edition of this book makes its appearance, the challenge of managing construction projects to successful outcomes continues unabated throughout the world Prestigious projects make the headlines: both those successful and those less so The public’s imagination is captured by, for instance, constructions to accommodate great sporting events such as the Olympics and spectacular buildings such as Burj Khalifa and Shanghai Tower But such projects overshadow the enormous amount of construction which contributes hugely to people’s well-being The importance of developing all projects effectively, both public and private, is central to economy in using the world’s resources Many factors impinge on success in this arena: development and utilisation of materials and new machines, training and education of a skilled workforce, political will and understanding of people’s needs, to name but a few A major need, central to effectively producing projects whatever their scale, is the organisation and management of people skilled in designing and building them As with all previous editions of this book, this edition focuses further on proposing and using systems theory as the organisational approach suitable for this task and addresses the increasing complexity of the environments within which construction projects find themselves placed In doing so, this edition has sought to explain how diverse approaches to organisation underpin systems theory and its relevance to construction project management as well as recognising the many competing paradigms and alternative perspectives available, for example in relation to differentiation and integration Recognition has also been afforded to recent emergence of the study of temporary organisations arising in mainstream management and its relevance to construction project management Whilst encompassing the need to develop further theoretical aspects of construction project organisation theory, this edition has also enhanced application of organisation studies to practical issues of construction project management More emphasis has been placed on the added complexity of construction project management by issues surrounding clients and stakeholders and by issues engendered by control and empowerment of project participants Additional focus has been made on sustainability issues as they impinge on construction project management, on reworked views on supply chain management and on developments in partnering together with clarification of the shifting terms and definitions relating to construction organisation structures and their uses Other general updating has been undertaken with some reorganisation of chapters and sections to aid continuity and clarity Six editions are not achieved without great indebtedness to colleagues from both academia and practice who have contributed enormously to my knowledge viii References 327 Loosemore, M (1999) Responsibility, power and construction conflict Construction Management and Economics, 17, 699–709 Loosemore, M & Tan, C.C (2000) Occupational stereotypes in the construction industry Construction Management and Economics, 18, 559–566 Lorsch, J.W (1979) Making behavioural science more useful Harvard Business Review, 57, 171–180 Love, P., Holt, G., Shen, L., Li, H & Irani, Z (2002) Using systems dynamics to better understand change and rework in construction project management systems International Journal 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management, 268 appointment contractor, 277 project team, 200 approval, 191, 208, 303 arms-length contracting, 171, 265 artefacts, 151 asset specificity, 69, 255 authority in matrix structures, 142 project manager, 128, 144, 153, 191, 239, 263 in projects, 222 behaviour leadership, 234 organisation, 249, 254 responses, 19 schools, 30 sub-system, 125 boundary client and construction process, 166 with environment, 34, 81 objects, 162 between sub-systems, 193 boundary control, 193 on LRA, 305 objective, 193 bounded rationality, 58, 254 brief, 120, 127, 201 competing factors, 122 conflict, 58, 126, 226 development of, 110, 115, 133, 145, 199 feedback, 101, 200 metaphors, 119 objectives, 78, 102 sufficiency, 78, 90 transmission, 200 uncertainty, 78 British Property Federation (BPF), 7, 25, 249 building information modelling (BIM) 75, 127 built-operate-transfer, 288 bureaucracies, 30, 34 business process re-engineering, 30, 56, 162, 176 civil engineering, 2, 14, 180, 202, 220, 255, 271, 276 clients environment, 82, 89, 99 integration, 89, 128, 194, 200, 259, 308 management of projects, 16 objectives, 121, 134 corporate, 115 establishment of, 199 public, 116 variety, 17 organisation, 17, 129, 134 effect on managing activities, 178 profiles, 117 Coase Theorem, 64 commissioning, 204 competitive tendering, 264, 276 conflict between firms and projects, 14 objectives, 78, 126 within the brief, 78 in the project management process, 12 construction management (CM), 2, 268, 277 construction process system, 35 contingency theory, 37, 51, 65, 66, 309 strategic, 37, 51, 66, 309 structural, 38, 45, 81 Project Management in Construction, Sixth Edition Anthony Walker © 2015 John Wiley & Sons, Ltd Published 2015 by John Wiley & Sons, Ltd 336 Index 337 contractor appointment, 277 integration, 264 matrix structure, relationship with design team, 206, 277 contracts, 17, 254 standard forms, 206 control loops, 300, 303, 307 critical theory, 57 culture, 56, 237, 242 subcultures, 160 decisions, 21 client, 115, 129 feedback, 101, 127, 185 key, 185, 203, 251 on LRA, 301 operational, 186, 203, 251 on LRA, 301 primary, 183, 251 on LRA, 301 process, 153 sub-system, 251 design-and-build, 271 integration, 155, 273 organisation matrix, 277 design team integration, 259 differentiation, 37, 70 definition, 100, 145 determinants, 188 on LRA, 301 empowerment, 240 environment, 41, 42, 81 client, 81, 113, 120, 127 definition, 34 differentiation, 37 institutional, 84, 91 protected niche, 98 task, 92, 98 uncertainty, 117, 121, 127, 182 environmental forces, 84 classification, 84 direct, 89 indirect, 89 non-technical, 81 at start of project, 125 sustainability,93 technical, 81 equifinality, 105 ethics, 161, 175 feedback decision points, 101, 127, 185 managing system, 190, 200 negative, 101 positive, 102 firms, 75, 79 First World War, general systems theory, 34 governance structure, 249 groupthink, 147, 221 guaranteed maximum price contracts, 265 hierarchy, 27, 61, 186, 195 industrial ecology, 94 industrial revolution, informal structures, 31 innovation, 5, 8, 17, 38 input, 124 institution theory, 40, 45 integrating mechanism, 91, 129 contingency theory, 37 range, 150 uncertainty, 99 integration, 37, 99, 150 client, 91, 200, 308 design team, 259 interdependency pooled, 149 reciprocal, 149 sequential, 149 on LRA, 307 meeting, 202 tasks, 199 uncertainty, 99 interdependency, 84, 99 on LRA, 301, 307 pooled, 148 reciprocal, 60, 148, 187, 193 sequential, 100, 148, 187, 193 Joint ventures, 163, 168 Key personnel, 155, 170 Knowledge based economy, 105 leadership, 162 charismatic, 48 lean construction, 171 linear responsibility chart (LRC), 297 location (territory), 189, 304 338 Index manager construction, 13 contract, 13 design, 13 project, 6, 36, 126, 261 management construction project definition, 7, 11 executive, 262, 275 non-executive, 261, 275 objectives, 16 definition, firms, 139 general, 13 gurus, 24, 56, 66, 102, 233 matrix, 14 ‘principles of ’, 27, 76 scientific, 127 management contracting, 2, 268, 277 integration, 270 matrix structures, 15, 22 mechanistic structures, 42, 81, 87, 91 megaprojects, 288 Mintzberg’s classification, 115, 215, 226 multi-disciplinary practices, 17, 49 integration, 154, 260 responsibility, 263 negentropy, 97 negotiated contracts, 17, 259, 267, 276 integration, 268 NIMBY, 110 objectives, 58, 78, 250, 256, 273 clients, 96, 134, 136 corporate, 115 establishment of, 199 public, 117 variety, 17 conflicting, 78 firms, 15 multiple, 126 project management, 12, 15 objects, 123, 151 opportunism, 161, 254 organic structures, 42, 81, 87, 91 organisation clients, 13, 120, 126, 134 competence, 96 complexity, 90 construction project conventional, 17, 259, 275 definition, feedback, 101 reform, design of, 200 effectiveness, 253, 276 informal, 18, 30, 44 learning, 55 matrix, 142 patterns, 17 theory, 17, 45, 249 uncertainty, 208 organisational economics (OE), 59 output, 24 oversight direct, 195 on LRA, 297 general, 195 on LRA, 297 partnering, 197, 227 plans of work, 297 population ecology, 45, 67 post-war, power, 28, 61, 125 gap, 228 in projects, 223 structures, 30 prime contracting, 274 private-finance initiative (PFI), 288 production costs, 252 professional adhocracy, 48 institutions, 2, 4, 86, 98, 106 organisation, 22, 47 professions, 2, 17 change, 100 project change, 90 conception, 180 co-ordinator, 128, 261 disposal, 204 inception, 182 outcome evaluation, 204, 311 functions of project management, 191 performance, 150 programme, 201 realisation, 183 responsibility, 263 tasks, 188 project management theory, 51, 74 Index 339 project manager, 6, 26, 122, 221, 246, 263 authority, 129, 144, 242 executive, 261 relationship with client, 144 recommendation, 191, 197, 205, 208 on LRA, 303 resource dependency model, 40, 83 SARFIT, 46, 67, 81, 97, 310 Second World War, sentience, 20, 79, 146, 161, 189, 223, 301 on LRA, 302 separate trades contracting, 268 sequence (time), 189, 304 serial tendering, 267, 277 skill (technology), 189, 304 social network theory (SNA), 296 socially constructed, 56, 61, 151 socio-technical approach, 151 soft systems methodology, 74, 119 stakeholders, 100, 122 strategic contingency, 39 subcontractors, 15, 17, 50, 143, 169, 207 management contracting, 268, 277 relationship to project management, 206, 265 sustainability, 93, 121, 182, 200 systems adaptive, 54, 98 boundary, 77, 190 classification, 77 closed, 34 construction process, 35 hierarchy, 77 maintenance, 190, 193, 198, 208 on LRA, 306 managing, 207, 250, 259 feedback, 284 on LRA, 284 monitoring, 191, 198, 208 on LRA, 305 objectives, 35 open, 34, 123 operating, 198, 207, 248, 251, 259 on LRA, 300 target cost contracts, 265 task sub-systems, 188, 208 integration, 203 teamthink, 147 techniques, 6, 17, 72, 87 for organisational design, 296 technology, 19, 124 clusters, 287 skill, 189, 304 territory (location), 189, 304 time (sequence), 189, 304 transaction cost economics, 83, 156, 166, 290 transformation, 124 TREND, 296 trust, 155, 167 two-stage tendering, 17, 266, 276 uncertainty, 18, 78, 90 contingency theory, 37 effect on brief, 78 effect on integration, 99 effect on organisation design, 208 environment, 127, 182, 208 value management, 130 virtual design and construction (VDC), 73 virtual teams, 69, 144 WILEY END USER LICENSE AGREEMENT Go to www.wiley.com/go/eula to access Wiley’s ebook EULA