Human Resource Management In Construction 2017E.

CHAPTER TWO
2 Organizational Context
2.1 Introduction
What is an organization?
An organization is a deliberately established social unit composed of people who coordinate their activities
to achieve a common objective.
It is a consciously coordinated social unit, composed of two or more people that functions on a relatively
continuous basis to achieve a common goal or set of goals.
Small organizations may require no specialization beyond distinguishing one individual’s job from another’s.
However, as organizations become larger and involve more diverse activities, it becomes necessary to divide
major tacks into depart mental responsibilities thus leading to some kind of structure.
Characteristics of Today’s Organization

Components of Organization
 People
 Goals or Purpose
 Structure
 Technology
Dividing the work of the organizations into basic departmental responsibilities potentially contributes to
effective management in several ways. The Potential benefits include:

 clarifying responsibility and authority within the organization,

 facilitate communication and control,
 improve decision making;
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 differentiate among activities,

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Properties of an organization:
The main properties of an organization of any form are:
 Distinct internal processing based on division of labor
 A hierarchy of authority
 A system of coordination and control
 A collective identity (team work)
Organizational Mission
Concern for survival: What is the organization’s commitment to economic objectives?
Customers: Who are the organization’s customers?
Products/Services: What are the organization’s major products or services?
Location: Where does the organization compete?
Technology: What is the firm’s basic technology?
Concern for public image: What are the organization’s public responsibilities, and what image is desired?
Concern for employees: What is the organization’s attitude toward its employees?
What should an Organizational Structure satisfy?
 Optimize human interaction with minimum barriers  Enhance motivation and trust;
 Provide clear and compelling direction;  Ease flow of information and decision
 Demonstrate effective leadership; making
 Match resources with skills;  Clarify authority and responsibility
 Create the desired levels of coordination
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

 Downsizing
A version of organizational restructuring which results in decreasing the size of the organization and
often results in a flatter organizational structure.

2.2 Individual and Organizational Behavior

Organizational behavior

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 The study of how people interact within an organization, including how individuals, teams, and the
organization itself function and how those interactions impact the organization's performance
(efficiently or effectively).
 It provides a framework for understanding and analyzing human behavior in an organizational
setting. By better understanding how and why individuals perform in a certain way, organizations can
better recruit, retain, and deploy workers to achieve its mission.
 It includes research on improving job performance, increasing job satisfaction, promoting
innovation, and encouraging leadership. Each of these goals comes with its own recommended
actions, such as reorganizing groups, modifying compensation structures, or changing
performance evaluation methods.
Some fundamental principles of organizational behavior include:
- Individual differences
- Perception
- Motivated behavior
- The desire for involvement
- The value of the person
- Human dignity
- Organizations are social systems
- Mutuality of interest
- Holistic concept
What Are the 3 Levels of Organizational Behavior?
 The first is the individual level, which involves organizational psychology and understanding
human behavior and incentives.
 The second level is groups, which involves social psychology and sociological insights into human
interaction and group dynamics.

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Organizational behavior can help with:

 Conflict resolution
Understanding conflict dynamics and resolution strategies can help maintain a harmonious work
environment.
 Decision-making
Studying organizational behavior can help with understanding the impact of leadership styles and
company culture on performance.
 Employee engagement
Engaged employees tend to perform better and contribute to the success of the organization.
 Performance management
Theories of performance management can help businesses manage and motivate their employees.
 Group behavior
Studying group behavior is essential for an organization to achieve its goals.
What are some common problems that organizational behavior tries to solve?
Organizational behavior can be used by managers and consultants to improve the performance of an
organization and to address certain key issues that commonly arise. These may include
- a lack of direction or strategic vision for a company,
- difficulty getting employees on board with that vision
- pacifying workplace conflict or creating a more amenable work environment,
- issues with training employees,
- Poor communication or feedback, and so on.
Individual behavior
 It is a part of organizational behavior that study how an employee or individual behaves, responds or
replies in a certain environment in organizations. In other word, it study about how people think, feel,
and act, and how these behaviors are influenced by various factors:
 Personal factors: - These include an individual's personality, values, attitudes, perceptions, and
learning.
 Environmental factors: These include political, economic, socio-cultural, and technological factors,
as well as organizational factors like structure, leadership, and rewards.
 Other factors:-These include an individual's motivation, skills, abilities, religion, marital status, and
experience.
 The individual behavior is a function of person, environment & the organization
 Individual behavior is important because it can have a positive impact on an organization's goals.
When individuals complement each other appropriately, the organization can develop positively.
 Managers can help motivate and engage employees by recognizing these differences and adapting their

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leadership approaches.

The individual characteristics in organizations can be classified broadly as Biographical and personality
characteristics.
1. Biographic Characteristics
Definition: Personal characteristics such as age, sex, and marital status that are objective and easily
obtained from personal records.
A. Age
What effect does age actually have on turnover, absenteeism, productivity and satisfaction? Let look at the
research evidence:
Age – turnover relationship:
 The older you get, the less likely you are to quit your job.
 As workers get older, they have fewer alternative job opportunities.
 Older workers are less likely to resign because their longer tenure tends to provide them with higher
wage rates, longer paid vacations, and more attractive pension benefits.
Age - Absenteeism Relationship:
 If older workers are less likely to quit, wouldn’t they also demonstrate higher stability by coming to
work more regularly? Not necessarily. Most studies show inverse relationship, but close examination
finds that the age absence relationship is partially a function of whether the absence is avoidable or
unavoidable.
 Generally, older employees have lower rates of avoidable absence than do younger employees.
However, they have higher rates of unavoidable absence. This is probably due to the poorer health
associated with aging and the longer recovery period that older workers need when injured.
Age – productivity relationship:
 There is a widespread belief that productivity declines with age.

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 An individual’s skills particularly speed, agility, strength, and coordination decay over time. In
addition, prolonged job monotony and lack of intellectual stimulation all contribute to reduced
productivity.
Age – job satisfaction relationship:
 Most studies indicate that there is positive relationship between age and satisfaction at least up to
60%.
 Satisfaction tends to be continually increased among professionals as they age, whereas it falls among
nonprofessionals during middle age and those rises again in the later years.
B. Gender
 Do females perform as well on jobs as males? Few issues initiated more debates, myths, and
unsupported opinions than whether females perform as well on jobs as males do.
 The evidence suggests that the best place to begin is with the recognition that few, if any important
differences between males and females affect their job performance.
 There are, for instance, no consistent male-female differences in problem-solving ability, analytical
skill, competitive drive, motivation, sociability, or learning ability.
 There is no significant difference in job productivity between males and females.
 There is no evidence that indicates an employee’s gender in affecting job satisfaction
Gender – Absenteeism:
 The evidence consistently indicates that women have higher rates of absenteeism than men do. The
main reason for these placed at home and family responsibilities on the female. When child is ill or
someone needs to stay home to wait for the plumber, it has been the woman who has traditionally
taken time off from work. This finding is time bounding as the role of child care or family care is
changing.
Gender –turnover relationship:
 Are females less stable employees than males? The finding is mixed up. Some found females have
higher turnover rates; others have found no difference. There was no enough information to draw
meaningful conclusion in this regard.
C. Marital Status
 Marital Status – Productivity relationship: There are not enough studies to draw any conclusions
about the effect of marital status on productivity.
 Marital status – absenteeism, turnover, and satisfaction relationship: Consistent research
indicates that married employees have fewer absences than unmarried coworkers and they undergo
fewer turnovers, and more satisfied with their jobs than their unmarried coworkers.
2. Personality Characteristics
A. Role Perception

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 It is a person’s beliefs about the specific tasks assigned to him/her.

 Employees have accurate role perceptions when they understand the specific task assigned to them.
Therefore for how firms improve role perceptions?
 One strategy is to ensure that employees understand their required responsibilities and to show how
these goals relate to organizational goals.

B. Situational Factors
 Situational factors include conditioned beyond the employee’s immediate control that constrain or
facilitate his or her behavior and performance.
 In addition to the employee’s motivation, ability and role perception, the situation in which the
person works also influences his or her behavior and job performance.
 Some situational characteristics- such as consumer preferences and economic conditions- originate
from external environments and, consequently, are beyond the employee and organizational crisis.
For example, 2008 financial crises of American bank due to fall dawn of house cost constructed by
loan from America banks and which shake the world at large.
Types of individual behavior in organizations
People engage in many different types of behavior in organizational settings. The followings are four types
of organizational behavior literature: Task performance, Organizational citizenship, Counterproductive
work behaviors, and joining and staying with the organization.
A. Task Performance
 The individual behavior in the workplace is support the organization’s objectives. Goal- directed
behaviors under the individual’s control that support organizational objectives are known as Task
Performance. These include physical behaviors as well as mental processes leading to behaviors.
B. Organizational Citizenship
 Organizational citizenship refers to behaviors that extend beyond the employee’s normal job
duties. These activities include
- helping others without selfish intent
- being actively involved in organizational activities
- avoiding unnecessary conflicts
- performing tasks beyond normal role requirements and
- charmingly tolerating impositions
 These organizational citizenship behaviors are highly related to each other and are caused by the
same factors.
 Organizational citizenship is higher among employees who believe the company is treating them
fairly.

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C. Counterproductive Work Behaviors

 Most managers evaluate employee performance based on their task performance and
organizational citizenship behaviors;
 some pay more attention to Counterproductive Work behaviors (CWBs). CWBs are voluntary
behaviors that have the potential to harm the organization by directly affecting its functioning or
property or by hurting employees in a way that will reduce their effectiveness.
 Scholars have recently identified five categories of CWBs:
- Abuse of others (e.g., insults and nasty comments),
- threats (threatening harm),
- work avoidance (e.g., tardiness),
- work sabotage (doing work incorrectly), and
- overt acts (theft).
Notice from this that CWBs include both acts of commission (deliberately harming the organization
and its employees) and acts of omission (ignoring or avoiding actions that would benefit colleagues
and the organization).
D. Honesty & LOYALTY (Joining and Staying with the Organization)
 Task performance, organizational citizenship, and the lack of counterproductive work behaviors are
obviously important for the organization’s success.
 But what many corporate leaders are chanting about these days is the need to attract and keep talented
employees. The simple fact is that if qualified people don’t join and stay with the organization, none
of these performance-related behaviors would occur.
 The importance of hiring and keeping qualified people is obvious when we consider the consequences
of not having enough employees to perform the work.
Personality And Individual Behavior
A. PERSONALITY
 Personality is a complex combination of physical and mental attributes, values, attitudes,
beliefs, interests, habits and other characteristics that comprise a unique self.
 Personality is the sum total of ways in which an individual reacts and interacts with others. It is
mostly expressed in terms of measurable traits that the person exhibits.
 Personality is the complete package of biological and psychological attributes plus actual
behavior patterns.
B. Behavior
 Behavior is how individual act under a given circumstance, it is the way through which individuals
respond to perceived stimuli. This behavior can be relatively determined or programmed and other
behavior may be the result of conscious thought and decision making.

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What determines an individual’s personality?

Personality appears to be a result of influences which are environmental and hereditary. It is
generally considered to be made up of both heredity and environmental factors moderated by
situational conditions.
A. Heredity:
 Refers to those factors that are determined at the conception of the individual like physical structure,
sex, and muscle composition.
 The heredity approach argues that the ultimate explanation of an individual’s personality is the
molecular structure of the genes which are located in the chromosomes. From recent studies on young
children, it was found out that traits like shyness, fear and distress are most likely caused by inherited
genetic characteristics. However, this does not mean that personality characteristics are completely
dictated or determined by heredity.
B. Environment:
 Refers to factors that exert influence on personality formation like culture, norms among family,
friends and social groups. These plus our experience plays a substantive role in shaping our
personality. The culture in which an individual is raised in establishes the norms, attitudes and
values that are passed along from generation to generation and as such creates consistencies over
time. Heredity sets the parameters or outer limits, but an individual’s full potential will be determined
by how well he/she adjusts to the demands and requirements of the environment.
 In other words, we inherit a range of capabilities, but the specific level of performance within
that range is acquired through learning.
C. Situation:
 The different demands of different situations call forth different aspects of one’s personality and there
are certain situations that are more relevant than others in influencing personality. These situations
differ in the constraints they impose on behavior.
Major Personality Attributes Influencing Organizational behavior;
There are a number of specific personality attributes that have been found to be powerful predictors of
behavior in organizations. These can be locus of control, - related to where one perceives the locus of
control in one’s life. There are also Machiavellianism, self-esteem, self- monitoring, and risk taking.
A. Locus of control
Considering the locus of control, there are two types of individuals: internal and externals.
 Internalists: are individuals who believe that they control what happens to them. (Considered as
having a high locus of control)
 Externalists: are those who believe that what happens to them is controlled by outside forces such
as luck or chance. (Those having a low locus of control)
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Using locus of control, behavior may be explained by whether employees perceive their outcomes as
controlled internally or externally. Employees who perceive internal control feel that they personally
can influence their outcomes through their own ability, skills and efforts. Employees who perceive
external control feel that their outcomes are beyond their own control; they feel that external factors such
as luck or task difficulty control their outcomes.
B. Machiavellianism
This name of the dimension for personality came from the individual Niccolo Machiaveili, who wrote
about how to gain and manipulate power. This is the degree to which an individual maintains emotional
distance, believes that the end can justify the means. Highly Machiavellian individuals tend to win
more, manipulate others more, persuade others more and are emotionally distant.
If high-Machiavellian judge a situation to be ambiguous, with few rules, they will be very aggressive in
asserting their tendencies. High Machiavellian have the tendency to manipulate others and try to
induce them to think in their terms. In jobs that require bargaining skills, for example, labour
negotiation or in jobs where there are substantial rewards for winning, for example, commissioned
sales, high Machiavellian will be more productive.
C. Self-esteem
This refers to the self perceived value that individuals have of themselves. It describes the degree to
which they like or dislikes themselves. Employees with high self-esteem handle failure better than
those with low self-esteem. High self-esteem individuals feel unique, competent, secure, and connected
to people around them. Those with low self-esteem tend to be less confident in their abilities, are
likely to fear decision making, lack negotiation and interpersonal skills and are reluctant or unable to
change.
D. Self-monitoring
This personality trait describes how well a person is able to adjust his or her behavior to meet the
demands of the situation. If an individual is high in self monitoring, this show s that he or she has a
good adoptability in adjusting to their external situational factors. On the contrary, low self monitors
tend to show high behavioral consistency between who they are and what they do. It seems logical to
say that high self monitors will be more successful in managerial positions where individuals are
required to play multiple roles.
E. Risk taking
This refers to the willingness of people to take chances. This characteristic which exhibits the
individual’s propensity to assume or avoid risk can be observed when individuals are making decisions.
Here, it will have an impact on how long it takes the person to make decisions and also on the amount
of information required before making their choices.
These characteristics can be more useful in some jobs but might be less demanded by other jobs. For
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example, high risk taking propensity may lead to more effective performance for a stock trader in a
brokerage firm because this type of job demands rapid decision making. But on the opposite, if we take
an accountant in a firm performing auditing activities, a high risk taking propensity may not even be
acceptable.

2.3 Organization Structure

 An organizational structure is a framework that outlines how an organization's activities are directed to
achieve its goals.
 It defines the roles, responsibilities, and relationships of its members, and how tasks are allocated,
coordinated, and supervised.
Child (1977), writing about organizations and their structures comments:
“The design of organization is one of management’s major priorities. This entails creating a structure
which suits the need of the particular enterprise or institution, achieving consistency between the various
aspects of the structure, and adapting it over time to changing circumstances.”
 The organization structure is a particularly efficient way in which to clearly establish;
 each individual involved and their position within the overall company,
 clear identities of their supervisors and those whom they supervises,
 the exact nature of their duties,
 who is responsible for what.
 An organizational structure can help an organization:
 Be efficient and focused
An organizational structure helps ensure that resources are used most effectively, resulting in higher
productivity and improved profitability.
 Improve employee performance
When employees are assigned specific tasks and responsibilities, they tend to be better equipped to excel
in their roles.
 Provide clarity and direction
An organizational structure helps employees better understand their roles and responsibilities within the
organization.
 Problems created by a misaligned organizational structure
 Rapid reorganization of business units, divisions or functions can lead to ineffective, misaligned
organizational structures that do not support the business.
 Poorly conceived reorganizations may create significant problems, including the following:
• Structural gaps in roles, work processes, accountabilities and critical information flows can occur
when companies eliminate middle management levels without eliminating the work, forcing

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employees to take on additional responsibilities.

• Diminished capacity, capability and quickness issues can arise when
a) lower-level employees who step in when middle management is eliminated are ill-equipped to
perform the required duties and
b) when higher-level executives must take on more tactical responsibilities, minimizing the value of
their leadership skills.
• Disorganization and improper staffing can affect a company's cost structure, cash flow and ability
to deliver goods or services. Ultimately, diminished capacity and lagging response times affect an
organization's ability to remain competitive.
• Declining workforce engagement can reduce retention, decrease customer loyalty and limit
organizational performance and stakeholder value.
 There is no single best structure, and the one selected for any organization will have its own benefits and
challenges. Interestingly many large, well-known companies change structures frequently as their
environments change. Mangers may adopt one of the following organization structures.

Fig. Types of Organizational Structure

 Benefits of Creating an Organizational Structure
There are many benefits to creating an organizational structure that aligns with the company’s operations,
goals and objectives. Clearly disseminating this information to employees:
 Provides accountability  Designates decision-making authority
 Clarifies expectations  Creates efficiency
 Documents criteria for promotion  Fosters collaboration

 Essential Elements of Clear Organizational Structure

Regardless of the special type of organizational structure you choose, it should have the following
components:

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 Chain of command  Decision-making authority

 Roles and responsibilities  Departments or teams within the
 Scope of control organization
 How to Choose the Best Organizational Structure
There is no one “right” organizational structure. When deciding which structure will work best for your
company, consider the following:
 Current roles and teams within the company.
• How are job functions currently organized?
• Does it foster communication and productivity?
• Does it impede or encourage employee growth?
 Your strategic plan. What are your company’s goals for the short-term and long-term?
 Feedback from employees, leadership and other stakeholders.
• What do those within your company say about how the company is structured?
• What feedback do you have from other stakeholders, such as customers and suppliers?
 Alignment. What structure will best support your strategic plans and address any feedback received?
 What are the three types of organizational structures?
1. A functional—or role-based—structure
• It is one of the most common organizational structures.
• This structure has centralized leadership and the vertical, hierarchical structure has clearly defined
roles, job functions, chains of command and decision-making authority.
• A functional structure facilitates specialization, scalability and accountability.
• It also establishes clear expectations and has a well-defined chain of command.
• However, this structure runs the risk of being too confining and it can hinder employee growth.
• It also has the potential for a lack of cross-department communication and collaboration.

This structure allocates activities and responsibilities on the basis of common function. The main
advantages of a functional organization structure:
 Staff are grouped according to their technical expertise
 Career and promotion paths are created,
 Control of functional activities is more or less centralized.

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 Addresses cost and quality very well

The main disadvantages are:
 Functional units tend to encourage the development of sectional interests which may become
at odds with corporate intentions,
 Conflict and disputes among the departments when firm performance declines.
 Communication and coordination among the departments are often difficult.

2. Divisional structure
• In a divisional structure, the organization is divided into multiple divisions, each responsible for
its own set of tasks.
• The divisions can be based on products, geographic areas, or customer segments. It's like a
corporation of "mini-companies" within a bigger entity, each serving a specific market or product.

• The structure’s primary strength is its focus; each division can respond quickly to its market
conditions without being weighed down by the broader organizational bureaucracy. Yet, this can
also lead to duplication of resources if multiple divisions perform similar functions.
a) The product- or market-based structure—is also hierarchical, vertical and centralized.
• It is instead of being structured around typical roles and job functions; it is structured around the
company’s products or markets.
• This kind of structure can benefit companies that have several product lines or markets, but it
can be challenging to scale.
• It can also foster inefficiency if product or market teams have similar functions, and without good
communication across teams, companies run the risk of incompatibility among various
product/market teams.

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b) The process-based structure—which is structured in a way that follows a product’s or service’s life
cycle.
• Similar to the functional structure, the process-based structure is structured in a way that follows a
product’s or service’s life cycle. For instance, the structure can be broken down into R&D, product
creation, order fulfillment, billing and customer services.
• This structure can foster efficiency, teamwork and specialization, but it can also create barriers
between the teams if communication isn’t prioritized.

c) The geographical structure is suitable for businesses with a broad geographic footprint.
• The geographical structure is a good option for companies with a broad geographic footprint in an
industry where it is essential to be close to their customers and suppliers.
• The geographical structure enables the company to create bespoke organizational structures that
align with the location’s culture, language and professional systems.
• From a broad perspective, it appears very similar to the product-based structure above.

It divides the organization activities into self contained entities, each responsible for marketing,
production, finance, personnel etc.
Where grouping is arranged around specified products or services, each group has its own specialist
functions provided at the operational level.
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The advantages of a product-based structure area:

 It enables the company’s major product groups to concentrate on their own priorities, within the total
business plan.
Pinpointing the responsibilities for profits and loss is easier.
 The main disadvantages are:
 Individual divisions may seek to promote their own objectives so forcefully as to endanger
wider corporate strategies.
 Product managers tend to compete for common resources instead of working together for the best
interest of the company,
The total personnel expense for manufacturing is likely higher due to the higher number of departments
working similar activities.
3. Matrix Structure
 Combining the elements of both functional and divisional structures, the matrix structure places employees
under multiple supervisors.
 Picture a grid (or 'matrix'); vertically, you might have functional roles and horizontally, project or product teams.
 An employee could report to both a functional manager and a project manager.
• With a matrix organizational structure, there are multiple reporting obligations. For instance, a
marketing specialist may have reporting obligations within the marketing and product teams.
 The dual-reporting relationship intends to optimize resource utilization and flexibility.
• A matrix structure offers flexibility, enables shared resources and fosters collaboration within the
company.
 It promotes adaptability in the face of complex tasks. However, it's not without its pitfalls, as the dual chains of
command can sometimes lead to confusion or even conflicts of interest.
• However, the organizational structure can be complex, so it can cause confusion about
accountability and communication, especially among new employees.

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You can create an organizational chart to visualize your company's structure and communicate its chain of
command.
The main disadvantages are:
 It helps to clarify who is responsible for the success of the project,

 It encourages functional managers to understand their contributive role in the

organization’s productive efforts.
The disadvantages are:
 The potential conflicts that can arise concerning the allocation of resources and the division
of authority as between the project groups and functional specialists,
 The possibility of divided loyalties on the part of members of project teams in relation to
their own manager and their functional superiors.
Despite these disadvantages, the matrix form probably offers the best answer to date to the issue of
handling the tension between the need to differentiate and the need to integrate the complex
activities of modern organizations.
TYPES OF CONSTRUCTION AND CONSULTANCY FIRMS
Persons may involve on a permanent and professional manner in any economic activities with the
purpose of making profit or gain. These activities may include manufacturing, distribution, service
rendering commercial activities or any other economic activity. Physical or juridical persons may
undertake economic activities for gain.
Below are mentioned juridical persons that can carry out economic activities:
1. Public Enterprises - such enterprises are wholly owned by the state.
2. Business Organizations - Such organizations carry out same kinds of economic activities as
traders. They run business for the purpose of making profit.

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There are six forms of Business Organizations under the Commercial Code of Ethiopia:
A. Ordinary Partnership:
- Involved in non-commercial activities.
B. General Partnership:
- involved in commercial activities.
C. Limited Partnership
D. Joint Venture - In law the term Joint Venture denotes two concepts of organizations engaged in
business for the purpose of which is to work for gain or profit.
E. Private Limited Company
- There should be a min of two members and max of fifty.
- Min. Capital for PLC is 15,000.00 ETB.
- It is not possible to transfer share to other company
- Liability is limited.
F. Share Company
- There should be a min of five members.
- Min. Capital for Share Company is 50,000.00 ETB.
- Share can be easily transferred.
- Liability is respected to respected shareholders.
In Ethiopia the following categories are used to classify construction and consultancy firms by the
Ministry of Works and Urban Development.
Types of Construction Firms
Construction firms are broadly classified based on trend of work as follows:
A. General Contractors
B. Building Contractors
C. Road Contractors
D. Specialized Contractors
The first three categories are again divided into ten grades with different resource requirements. The
Ministry has placed the basic human and equipment requirements to attain the different licenses with
different grades.
Types of Consultancy Firms
Consultancy firms are broadly classified as follows:
A. CA – Consultancy Architects
B. CAE – Consultancy Architects and Engineers
C. HBC – Consultancy Highway and Bridge
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D. CE – Consultancy Engineers
E. SC – Specialized Consultancy
All of the above categories are divided into six grades with different resource requirements.
Project or Site Organizations
Different forms of organizational structures are used in the construction industry. The
organizational structures can be classified into two:
A. Parent or Head Office Organization
B. Project or Site Organization
Parent or Head Office Organization
As the name implies this organization structure is relatively stable and shall be carefully
structured.
Project or Site Organization
On any given project site the main bodies involved in the construction activity are the contractor and the
consultant. Thus, the organizational structure for a contractor in a high way project.

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2.4 Leadership Role

 Leadership is a dynamic process at work in a group whereby one individual over a particular period of
time, and in a particular organizational context, influences the other group members to commit

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themselves freely to the achievement of group tasks or goals.

 In many instances managers appear from ranks of the organization as a result of being the best Engineer,
the best Economist, the best Scientist, and the best Technician and so on rather than the individual’s
ability of demonstrating the proper leadership characteristics for the position.

Thus, the individual may find himself charged with the responsibility of directing a group without being
adequately prepared for the task. In response to this charge, the new manager must quickly acquire the
administrative and managerial skills to go along with the technical skill that has already been
demonstrated. This can be accomplished to some extent t`hrough a better understanding of the basic
management styles and the desired characteristics of leadership.
i)Managerial Styles: Although there are many individual variations, the two managerial styles
most often discussed are:
 The autocratic approach and
 The democratic approach
The autocratic concept: The democratic concept:
-- Basically dictatorial in nature --Participative and non-pressure oriented
-- Interests primarily centered on the leader --Organizational interest is group centered
-- Decisions are usually unilateral -- Individuals has a say in decision making
Although both styles of management are prevalent for certain situations, the democratic leadership style
has been accepted as being more effective from the motivational standpoint.
Democratic leadership implies an organization environment where employees have a chance to grow
and develop their skills, where formal supervision is considerate and where individual opinions are
solicited and respected. As compared to the autocratic approach, management is committed to the
recognition of employees as dignified human beings and not merely as factors in a production scheme.
When applying the democratic style of leadership in a pure sense, some cautions must be exercised.
Obviously an organization where an individual in the ranks has ‘equal say’ with the boss is not feasible.
Some modifications must be made to include the necessary authoritative provisions to allow for positive
direction from the top down such that the organization can accomplish its functions with a minimum
amount of conflict.

Practices that directly support the democratic style: Participation Communication.

Participation:
 Sharing in the establishment of personal goals and objectives on how to fit into the overall
organization and how best contribute to the cause.

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 Sharing in the evaluation and decision making activities pertaining to alternative ways of meeting
both organization and personal objectives.
Communication:
The ability to communicate well is a leading criterion of managerial success and is a necessary requisite
in working with other people. Communication is very important in that the organization as a social
entity needs both formal and informal interaction on a continuing basis. Formal communications may be
accomplished both vertically (up and down) and horizontally (across lines of authority) in the
organization structure and are usually generated through one or a combination of the following:

 Periodic group meetings with members of the organization should be held to discuss matters
pertaining to management policy interpretations and changes, related activities of importance
occurring outside the organization, administrative actions, technical and organizational problems,
etc.

 Individual meetings between the manager and each subordinate member of the organization should
be scheduled to discuss on matters to review personal goals and objectives to discuss any items
related to the subordinate task and performance.
 Written material such as reports, memoranda and letters. Care must be exercised to ensure that
written communications are prepared in the proper tone, include the necessary subject area
emphasis where needed, and are clear and factual in content. This is important since it is relatively
easy to misinterpret information and create problems as a consequence.
Communications of an informal nature constitute the day-to-day interchanges between employees at the
same level, employees and managers within a given department, employees and managers in different
departments and so on. This method of communication is necessary to fulfill social needs and is
permissible as long as it doesn’t interfere with the line of authority and the objectives of the
organization.

i) Leadership characteristics: The organization is composed of a group of individuals with varying

level of abilities, skills, different roles and expectations, diverse personal goals, and distinct behavioral
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patterns. The challenge for the manager is to integrate these various characteristics into a cohesive force,
leading to the accomplishment of organization objectives. The manager must not only ensure that the job
is accomplished in a satisfactory manner, but inspire and motivate his subordinates to excel in the
accomplishment of organization objectives by acquiring a better understanding of the people in his
organization.

 Recognize the personal characteristics of each individual in the organization in order to better match the
individual with the job requirements. In essence, the manager should assign employees to the types of
work they do most effectively. (Economies of Scale),

 Inspire each individual to excel in his job by creating an atmosphere of personal interest. An employee
will tend to perform better if he knows that the boss is personally interested.

 Be sensitive to employee problems such that each can be addressed on personal terms. The solution to a
problem should, if at all possible, consider the effects on individual employee.

 Evaluate employees on a personal basis and initiate rewards promptly when warranted. Promotions and
merit raises should not be oriented to the organizational hierarchy alone, but should also be directed to
the best performers.

As a goal, the manager should strive to exhibit the characteristics listed hereunder:
1. Acceptance: Earns respect and has the confidence of others,
2. Accomplishment: Effectively uses time in meeting goals and objectives,

3. Acuteness: Mentally alert and readily comprehends instructions, explanations and unusual
circumstances,
4. Administration: Organizes his own work and that of his subordinates, delegates
responsibility and authority, measures, evaluates and controls position activities,
5. Analysis & Judgment: Performs critical evaluation of potential and current problem areas, breaks
problem into components, weighs alternatives and arrives at sound conclusions,
6. Attitude: Enthusiastic, optimistic and loyal to the firm
7. Communication: Promotes communication within and between organization functional
elements,
8. Creativeness: Has inquiring mind, develops original ideas, and initiates new approach to
problems,
9. Decisiveness: Makes prompt decisions when necessary,

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10. Dependability: Meets schedules and deadlines in consistent manner and adheres to firm policies
and procedures,

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11. Developing Others: develops competent successors and replacements,

12. Flexibility: Adaptable, quickly adjusts to changing conditions, and copes with the expected,
13. Human Relations: Is sensitive to and understands personal interactions, has the feel for
individuals and recognizes their problems, considerate of others, ability to motivate and get
people to work together,

14. Initiative: Self-starting, prompt to take hold, seeks and acts on new opportunities, exhibits high
degree of energy in work, not easily discouraged, and posses basic urge to get things done
15. Knowledge: Possess knowledge (breadth and depth) of functional skills needed to fulfill positions
requirements, uses information and concepts from other related fields of knowledge,
16. Objectivity: Has an open mind and makes decisions without the influence of personal and
emotional interests,
17. Planning: Looking ahead, developing new programs, preparing plans and schedule requirements,
18. Quality: accuracy and thoroughness of work, and maintains high standards consistently,
19. Self-Confidence: self-assurance, inner security, self-reliant and take new development in stride,
20. Self-Control: Calm and poised, under pressure,
21. Self-Motivation: Has well planned goals, willingly assumes greater responsibilities,
realistically ambitious, and generally is eager for self-improvement,
22. Social ness: Makes friends easily, works well with others and has sincere interest in people,
23. Verbal Ability: Articulate, communicative and is generally understood by persons at all
organization levels,

24. Vision: Possesses foresight, sees new trends and opportunities, anticipate future events and is not
bound by tradition or custom.
In actual practice, it is well recognized that not all managers will meet the criteria specified above;
however, the more progressive managers will strive to improve in the directions discussed. Others in
management positions will not improve, owing to an attitudinal problem. Some of these inhibiting factors
common in many firms are as follows:
 The manager will assume an authoritarian style of management stifling participation and
communication,
 The manager may refuse to make decisions when necessary,
 The manager may place personal interests above those of the organization. Examples are the
acquisition of nonessential human and material resources to improve personal status like empire
building.

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 The manager may be resistant to trying something new. Examples the utilization of available tools
that are unfamiliar but will improve job performance, pursuing new technologies, etc.
 The manager may refuse to disseminate information that could conceivably promote effective job
completion and organization growth,
 The manager may be inconsistent in leadership practices. For instance, decisions may tend to be
conflicting, decisions may be reversed, implementation not consistent with planning information
etc.
Reasons for the above inadequacies may stem from personal insecurities on part of the manager,
complacency, a cover-up for administrative or technical incompetence.
2.5 Groups and Teams at Work
A formal work group is a collection of two, three or more persons formed for a variety of purposes
to:
 Process tasks,
 Solve problems,
 Take decisions,
 Share information and
 Develop new ideas.
Three conditions should be fulfilled if a group is to be distinguished from a random collection of individuals:
a)interact with one another,
b)psychologically aware of one another,
c) Perceive themselves to be a group.
Key variables influencing group behavior or group performance include the following:
i. Group Size:
 There is no magic formula for arriving at the optimum size for a group. In one situation three persons in
a group could be ideal for the performance of group goals; in another situation three could be totally
inadequate. Much depends on other variables such as the nature of the members, the task they are
required to perform and the appropriateness of the leader.
 However, as a general rule we can say that the size of any group should be sufficient to provide enough
resources from within its membership to enable the achievement of its goals both to the satisfaction of
the organization and to that of the members.
 Where speedy action is required, a small group of three or four persons may be preferable. Where the
quality of discussion is important then a larger group, representative of different interests and skills,
may be more effective in achieving its goals. Effective groups seem to be those where there is active
participation by all the members

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 Smaller groups tend to be more cohesive than larger groups, and encourage fuller participation, but may
suffer from lack of talent. Smaller groups may be easier to control, from the leader point of view.
Larger groups, by comparison, may develop sub-groups, which often make leadership more difficult
since internal conflicts may develop.
ii. Group norms
 All groups establish some sort of standards of behavior (norms) for themselves. Work groups develop
their own standards of social and work behavior. There exist five stages in group development:
Stage 1: Forming: Finding out about the task, rules and methods, acquiring information and
resources, reliance on the leader.
Stage 2: Storming: Internal conflicts develop, members resist the task at the emotional level.
Stage 3: Norming: Conflict is settled, cooperation develops, views are exchanged and new
standards (norms) are developed.
Stage 4: Performing: Teamwork is achieved, roles are flexible, and solutions are found and
implemented,
Stage 5: Adjourning: The team disperses, members prepare themselves for new roles.
 Newly formed groups take time to develop their own norms, initially taking stock of their situation,
then attempting to tackle tasks in a head-on fashion before moving into the more considered stage of
‘norming’. In progressing to the ‘performing’ stage, groups have abandoned or modified many of the
norms imposed on them by the organization at large and their leader in particular, and have effectively
demonstrated a degree of ownership of the task and the methods required to achieve it.
iii. Group Cohesiveness:
The cohesiveness of any group is the extent to which the group members develop strong ties to each other
and to the group as a whole ‘team spirit’. It is also a measure of the ability of the group to attract new
members. A very cohesive group is one that demonstrates strong bonds of loyalty within its membership
and strict adherence to the established norms of the group. Cohesiveness develops with the life of a group.
New groups lack it, whereas old fashioned groups are typified by it. Factors encouraging cohesiveness
include:
 Similarity of work,  Prospect of rewards,
 Physical proximity,  Leadership style of managers,
 System of work,  Common social feature such as age
 Group size, group, sex etc.
 External threats,
Where a high level of cohesiveness has been achieved in a group, external forces will play a significantly
reduced role in bringing about change in a group. Change in such a situation will only be realized if key
members of the group agree to adopt the new ways. Less cohesive groups are more easily changed from
without. Hence the strategy of ‘divide and rule’ is aimed at preventing cohesive groups from developing.

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iv. Nature of Task:

The nature of task can affect group behavior in several ways:
 A specific or clearly defined task requires a different leadership style from that required for an
unstructured, possibly ambiguous task,
 A task requiring close cooperation makes team development a key priority, whereas in a situation
where people can work at their own task in a group, individual needs will tend to be more important
than team needs.
 The importance or salience of the task will have a decisive effect on the motivation of group
members. It will also attract greater attention from management, possibly implying the use of tighter
controls.
 Time can be an important factor in group behavior. Urgent tasks or emergencies will clearly require
a task oriented approach. Non urgent tasks can permit a more employee centered approach.
v. Nature of Group members:
Another important variable in groups is the nature of the membership. The effectiveness of a
group in achieving personal as well as organizational goals depends partly on the range of skills
and attitudes possessed by the individual members.
 The relevant knowledge possessed by the group members,
 The levels of skill that an individual contributes,
 Personal characteristics within the group,
 Effectiveness of the leader
 Experience of the group in working together.
vi. Working Environment:
 This context can be seen from two principal perspectives: the physical and the social.
 The physical aspect of environment is important because they can permit proximity or isolation
between people. The closer people are physically, the greater the interaction between the group
members. Conversely, as mentioned above under the nature of the task, relative isolation acts as a
barrier to interaction.
 The social environment is even more influential than physical, for we are concerned with the very
culture, or lifestyle of the organization and its constituent groups. Key questions for assessing the
social environment are as follows:
- What is the basic orientation of the top management – task oriented or employee
oriented?
- How is motivation achieved – by threats and rewards, by attention to individual needs or by
providing satisfying work?

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- How is the shape of the structure – relatively flat or multi-layered?

- How are rules and procedures handled, and what purposes are they intended to serve?
- How important is an individual in the organization?
- What degree of participation in decision-making is permitted by senior management?

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