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People And Organizational Management In The Built Environment Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 5426 words Published: 1st Jan 2015

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The purpose of this essay is to look deeply of people and organization management principles and its role in the built environment industry, and also, to find out how management theories can help facing the key challenges of the modern construction industry.

“……The word “manage” derives from the Latin manus, meaning “The hand”. In 19th century, with the industrial & manufacturing revolt throughout the Western Countries, technological & scientific progress started gaining momentum and management theories emerged, finally splitting management theory into two main categories, namely the practicing managers, such as Taylor and Fayol, and the social scientists, such as Mayo and McGregor” (Cole, 2004, p. 3).

Since that era many management theories and management approaches has helped to increase the scope of management concepts and over the last twenty years the focus has been on organizational & staff effectiveness

(Cole, 2004. p. 5).

Now a days the construction industry is the combination of many different types of organizations, each with different goals and objectives. These different organizations have to realize a client’s needs/wishes & achieving the project completion. Therefore an effective management system is the key to successful project.



Every construction project has its specific qualities, therefore required its own unique organization structure, in order for the staff and parties involve on that project to coordinate their activities and maintain the required communication, in order to meet the project’s objectives. This is also point out by Kerzner. “…..There is no such thing as a good or bad organizational structure; there are only appropriate or inappropriate ones” (Kerzner, 2006, p. 89). Therefore, organization of the new effective working team is most important, when developing a new temporarily organization structure to meet the project requirements.

Hence, Management means human skills and ability to organize people and resources in built environment in a manner of planning, organization, and leading to achieve project objectives.

According to Hampton view, “…..management work is involved in combining and directing the use of recourses to achieve a particular purpose.” (Hampton, 1977)


Management History (Vol. 1 No. 1, 1995, pp. 59-77)

Dr. Robert W. man

Royal Institute of Technology


Civilization means the fruitful efforts of our fore fathers & those who born before us. The evolution of modern management concepts starts in the nineteenth century and grows during the twentieth. The uprising in management theories from classical theory to the Japanese management style.

Today’s management theory & modern management concepts is the result of the and efforts of many people.

The basics of the modern organization came into being during the nineteenth century with the boom of the factory manufacturing system, principally in the textile industry, where mass production became the milestone of yield.

However, Management thinking was slow to grow during this era. During this period two major management & social theorists took up this challenge and described as the so-called Pre-Classicists of management approach.


PLATO. Plasto was interested in real world management approaches.

SOQRAT. Soqrat was the first Muslim thinker, who wrote on the Muslims management style, and specially the dealings of a kingdom, with its boarder nations.

IMAM GAZALI. The thinker of the modern era, in muslim’s world. He was the best leader, and scholer. Who said “religion can be present with physical norms and examples, but law always need powerful implementation.


Robert Owen (1771-1858)

Robert’s ideas started within a cotton mill in Scotland where he has taken a deep interest in the social welfare of the 500 child employees. Taking a legal movement to limit the age of child employment to those over the age of ten while reducing the workday to 10 hours too. In 1813 Rober published a small booklet, named A New vision of the Society, where he had present his vision of the child labors rights protection.

Charles Babbage (1792-1871)

The “father of the modern age computer” Babbage’s major management contribution came from the idea of the profit-sharing scheme including an employee bonus as well as sharing of the profit into employees. These pre-classicists show the way for the theoretical approach of the classical school.




Management theories are listed below;

Classical theories

Scientific approach

Bureaucratic approach

(Max Webber)

Human relation theories

(Elton Mayol)

System theories

Contingency theories

(Lawrence and Lorch)

Classical School

The classical school was mainly concerned with the improment of management effectiveness within organizations. And to provide the hints to a manager needs for dealing with challenges. The classical school further divides into the “bureaucratic management”, “administrative management” and “scientific management” branches.

Bureaucratic Management

Max Weber (1864-1920) is grouped into the bureaucratic management stem of the classical school. Weber’s view evolves the sharing of power and authority in the modern world. He had presented a “rational-legal authority” model for an ideal type bureaucratic management.

Scientific Management

This branch of the classical school deals with the scientific management approach. Emphasizing experiential approach for developing a comprehensive management solution.

Frederick Winslow Taylor (1856-1915)

Taylor is famous as the “father of scientific management.” During working at the steel mill he performed extensive experiments on worker productivity and develop the “task system,” method.

His experiments is based on determining the best way of performing any work activity, its required time, resources and material needed and the work sequence.

Frank (1868-1924)


Lillian (1878-1972) Gilbreth

Frank & Lillian Gilbreths were strong advocates of modern approaches of management. After general studies of bricklayers, he was capable rearrange and reduce the motions in bricklaying by producing an almost 98% increase in the brick maker’s production while not increasing the efforts required.

His system is known as “speed work” which was achieved by reducing extra and unnecessary motions in brick making process.

Administrative Management

Henri Fayol (1841-1925)

Henri belongs to the administrative management stem of the classical school. Fayol stated in his book that management theories can be developed and taught to others for practice. His first book on administration was published in 1916. The book got famous in the USA after a second English translation was published in 1948 with the title “Common and Industrial Management”.

Chester Barnard (1886-1961)

Chester is the important member of the administrative management school. Barnard published his book “The Role of the Executive” in 1939.

Basically, he feels that it is most important for managers to develop a significance of encouragement & cooperation.

The Behavioral Movement

In the twentieth century, questions were raised regarding the training and motivations of employees and staff workers in organizations. Management principles developed during the classical period were only useful in dealing with management challenges but could not clarify the internal & physical behavior of individual employees.

These main beliefs of classical management theory were helpful in placing management goals in the perception of an organization; however, they failed to provide management apparatus for dealing with employees challenges.

Finally, classical theory ignored employee motivation and behavior.

Its major theorists include Mary Parker and Herbert Simon who turned from examining individual behavior to organizational behavior.

Mary Parker (1868-1933)

She strongly believes in the intrinsic problem solving ability of people working together. Unlike classical management’s strongly stepwise position of authority in organizations, Parker emphasize that power should be shared in order to resolve problems within organization. She is known for her method of conflict resolution. as she described three choices of conflict resolution, (a) domination, (b) compromise (c) voluntary obedience by one side over another.

In this case, both parties will be happy as the issue has been resolved according to their desires. Conflict resolution involves kindly working with others to enhanced inventive ideas by providing strong personal & organizational benefits.

Herbert Simon

Herbert Simon is basically critical of the principles of administration including extent of control and harmony of command while saying all of the principles collectively were “no more than proverbs”. Simon found the principles of classical administration to be opposing and unclear.

Simon’s major management contribution is the decision making theory for which he has received a Nobel Prize.

Human Relations Movement

The practice of Mary Parker and her experiments criticism on Classical School led to a deeper consideration of the wants & needs of the employees and the role of manager to fulfill their wants and needs.

Abraham H. Maslow (1908-1970)

Maslow was the first thinker to adopt a theory of motivation based on consideration of human needs. Maslow’s theory of human needs has three assumptions.

First, human needs are never satisfied.

Second, human behavior is fixed but need motivation.

Third, human needs can be classified based on importance from the lowest to highest.

Douglas McGregor (1906-1964)

McGregor another major theorist related with the Human Relations School of management. He believes on two kinds of managers. One type of manager, Theory X, has a negative view about employees considering employees lazy, untrustworthy and incapable of responsibility.

Theory Y, assumes employees are trustworthy and capable of assuming responsibility having high levels of motivation.

Theory X

1. Employees usually do not work and will try to avoid responsibility.

2. Since employees do not working, they have to pressurized and threatened with punishment to force them to work.

3. The average employee is lazy, irresponsible, is not ambitious, and basically desires security.

Theory Y

1. Work is as natural activity and most people desire to work.

2. Workers are responsible for accomplishing their job and responsibilities.

3. Rewards & incentives are highly important for employee’s commitment to achieving work targets.

4. Under favorable conditions, almost every employee will accept responsibility.

5. Employees can be pioneering in solving company’s problems.

6. Arabic firms usually use only a small percentage of their employees’ abilities.

Theory X and Y are very helpful & highly advisable for improving management style and employee’s motivation.

Behavioral Research Models

A major work has been carried out on behavioral research trying to describe the best management style. Two of these researchers are Renesis Likert and Frederick Herzberg, conducted a series of experiments on the basis of a good and bad supervisors according to their high and low Productivity. Their research was based on employee’s interviews in different departments in different organizations where scales of feelings were developed, regarding employee attitudes toward their supervisors.

Frederick Herzberg

Another pragmatic research was performed by Herzberg on 300 managers and accountants. The research objective was to mention work situations where the employees feel highly satisfied from his job. The research reveals that the work and accomplishment as well as recognition for the accomplishment are the major motivators. Herzberg mentioned these factors satisfiers or motivators.

Those factors having a negative impact on the employees are the working conditions, salary, job security, supervisory methods and the general company management climate. Herzberg terms these factors hygiene factors.

From this research Herzberg create the motivation-hygiene model of management. This model shows that high motivation of employees may achieved with challenging work where achievement, growth, responsibility and advancement are encouraged and recognized.

The environmental or hygiene factors, such as insufficient lighting, ventilation, bad working conditions, small salaries, and poor supervisory relations, serve as dissatisfies.

David C. McClelland

McClelland from Harvard University has done research on motivation. Using the Thematic Apperception Test (TAT) where an individual worker writes a descriptive analysis of their individual relationship with the organization, David finds out the motivational state of the subjects.

Based on this research, McClelland prescribed an achievement motivation theory consisting of 4 sets of needs: accomplishment, capability, association, and authority.

Achievement and motivation is a need to survive and employees have to succeed in upcoming future challenges. David believes people have basic important needs. His motivation theory is very important for managers to understand the employee encouragement and motivational prototypes.

Peter Drucker

Drucker writing has contributed to management concept & thought. He is considered to be the father of management by objectives (MBO).

in the 1950’s Druker developed this most popular management theory where strategic management decisions are formed through management and employee interaction and cooperation.

His theory of system combine many different theories into one functional system where all the objectives of the organization are grouped into discrete processes such as inputs, homeostasis, parameters, processing, outputs and feedback.

And this system can be further analyzed in terms of subsystems such as operations, production, finance, marketing, personnel etc. These subsystems are further analyzed in terms of interactional processing with their internal external systems.

The Contingency Approach

Contingency theory presents another alternative managerial theory alike to systems theory; contingency theory does not prescribe the implementation of certain management principles to specific condition. This approach is recognition of the importance of individual manager performance in a given situation. It believes on the power of manager and his control over a situation and the degree of uncertainty in that given situation.

Japanese Management

A major publication deal has occurred in recent years regarding the Japanese management style. As described by Dr. William Ouchi in his books Theory Z and The M-Form of Society has point out the key qualities & major basic concepts of Japanese management style.

The question of why Japanese management style has been so successful? One answer is the high level of trust of employees on their top management.

This level of trust enable Japanese employees to have a power of decision-making authority. Japanese management also insists on the concept of intimacy in its managerial relationships where personal relationships are highly respected.

Japanese organizations are a social memory. The present efforts of employees receive future rewards even if the employee may no longer remain beneficial. Their past contributions for the organization provide a form of organizational endowment.

This insures their loyalty with the organisation while acting as role models for current employees. .

The Japanese school of management state that personnel policies is an investment in human capital award the organization, necessary to achieve high production & productivity.

ROLE of People and Organizational Management

Principles in the “Construction Industry”

In modern age construction industry means different types of machines and equipments and a large number of employees with different culture with varying skills. These make the construction industry a complicated one.

Project management need to work on time, cost and quality. there have to be a good planning; employees have to be well organised, trained and motivated and coordinated to achieve the project completion goal. From the various management principles earlier discussed, it would be more appropriate to adopt the SYSTEM THEORIES of management in the construction industry.

System approach is basically an open management style which interacts with its internal & external environment, and gets feedback into the system. The major variables that are to adopting the systems approach to the construction organizations are;



Organization structure


discussing the system theory mr. Drafit explained that, it is an extension of the humanistic perspective that describes organizations as open systems that are characterized by entropy, synergy and subsystem interdependence.

“……..He further explained that, a system is a set of interrelated activities that function as a whole to achieve a common goal. It functions by getting inputs from the external environment, transforming them in specific ways, and discharging outputs back to the system environment”. (Daft, 2003).

Raw Material Resources



Information Resources


Transformation Process Management /Production & Technology

Employee Satisfaction

Profit & Loss

Product Services


Environment Organization



System View of Organisation

Contingency Theories & “Construction Industry”

Due to different types of construction projects in construction industry, ranging from new built, to refurbishing and renovation. Therefore, different types of projects will determine the selection of team to be appointed and the equipments and plant to be used. Also, the location of the project is very important aspect. In view of these complications, the project manager might decide to use any of the organizational management principles applicable. This is what the CONTIGENCY THEORY is all about.

“…….The core of the contingency viewpoint is that management practices should be according to the requirements of the external environment, the technology used to make a product or deliver a service, and the people who work for the organization”. (Hellriegel et all, 1999).

“…….According to Mr. Daft, is that, certain variables exist for helping management understand the forces of situations. This view is telling us that what works in one setting may not work in another situation. Management job is to search for important contingencies that suites the situation”. (Daft, 2003).

While executing a construction projects, most of the works are awarded to sub-contractors, who further employs other people to work with in the same project. These, makes the work of the project manager a difficult task. In order to tackle this situation, the clear understanding of the Leadership, Team, Power and Motivation is very important.


“……Leadership is the one who motivates, influence and controls subordinates to work towards achieving the objective of the organization”. (Graham et all, 1998)

“……In the construction industry, the project manager is faced with challenges of delivering a project on time, cost and quality, problems of constant report to client, coordination and motivation of subordinates. These facts make it necessary for a leader to be bold, visionary and ready to implement. He is the pivotal force of the project, hence Hitt explains that, “as a pivot, leader has a multiplier effect on the organization for which he is responsible”. (Hitt, 1998)

“……..Also, leaders must develop skills for interpersonal relationship. As Katherine Hudson puts it, “a leader can’t simply threaten or coerce people into complying”. (Hellriergel et all, 1999)


“…..The construction industry employs people with varying skills, knowledge and & culture. In project execution, these group of employees works interacting together for the completion of the project. These set of people known as a team. “The characteristic of a team is that its members voluntarily coordinate their works in order to achieve group objectives”. (Graham et all, 1988, p.52)

Every team must have a leader, and his works is made easier if he posses good leadership skills, since -the team concept implies a group with a sense of shared mission and collective responsibility. (Daft, 2003)


“…….Power can be described as the capacity to affect other people’s behaviour without their permission. Therefore, within an organization, power differs from authority. A manager may have the authority to control resources but may be powerless. Its mean Authority does not guarantee power-definitely, it is only one possible source of power.

Power in organizations makes social and overall organization systematic & productive, but still it can be destructive among the managers, therefore needs to understand the capacity of power rather than decry it. Hence, avoiding power struggles, experiment with structure negotiate, sharing of power, are important in modern and perfect organisation.” (Hunt, 32, 1986).

This explains the powerless scenario in construction project in Dubai, where the procurement method is traditional. The project management has authority over his employees but does not have financial power on them, since the financial power is an exclusive right of the client.


People with varying cultural background, different needs and wants, work in the construction industry, and the industry would certainly want to keep their capability and skill for as long as possible. Hence, it is most important to satisfy their needs, wants, encourage and reward employees. This is knows as motivation.


Conduct theory

Process theory

Reinforcement theory

“……….The most popular theories of motivation are;

Maslow’s need hierarchy,

McClelland achievement and

Herzberg’s two-factor model. (Callaham et all, 1986),”

“…….The Maslow’s Hierarchy of needs which classifies needs into physiological, safety, social, esteem and self-fulfillment, is the most popular within the construction industry.” (Amstrong, 1996)

Stress and Time Management

Unlike other industry, in the construction industry, there is need for projects to be handover to the client on scheduled. But recent occurrences have proved that, there are factors when project delivery could be affected due to the following;


Change in design plan


Natural disasters & weather condition.

These factors can pressurize the project team, which if not well managed, might affect project delivery, cost, time and quality.

To eliminate this problem in the construction industry, the understanding and practice of time and stress management by all team members is very necessary.

Stress Management.

Though some individuals have ability to work under pressure, but still pressure resulting to stress, can cause tiredness, physical body upset and, possibly, aggression towards fellow coworkers which might affect team work.

Stress can be managed by,

Timing of duties

proper planning

Keeping stress dairy

Mindful relaxation

Rest ruction jobs to remove extreme stress elements.

(Graham et all, 1998)

Time Management

“………The time factor in construction industry from inception to commissioning of a project, Good use of dairies, Microsoft project to make out chant diagrams, specifying time for various tasks, milestones and total project duration and also using time series models-the basic idea of this model is that past trends should be identified and then extrapolated into the future.” (Ball, 1984)

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Management Theories &

The Key Challenges of Construction’s Industry.

“…….management structure for any organization have been described by various schools of thoughts; in Scientific theory as described by Taylor, there is only one best way to perform task, Max Weber, in Bureaucratic theory have said, management is formulation and implementation of strategies, while the behavioral theorist have said, satisfying the needs and wants of workers, makes the work better.” (Hellriegel et all, 1999)

Faster development in technology and rapid evolutionary change in mankind history, have impacted some of the bases on which these theories were formulated.

These had brought vital changes to organizational structure. Modernization and competition have made management theorist, to begin and to evaluate issues as, efficiency, technical, political, power and customer satisfaction.

These key challenges have forced management practitioners to identify and develop modern management theories.

The key issues of these theories are;

Developing efficient and effective management

Cole in his view, supported this argument by saying that,

“…..There is a vital need for management to change internal & external environment of the organization”.

“……Development of norms & standards of excellence within the organization to be made”

“……Formulation of global vision & strategy in the light of international trade to be formed.”

“……The need for broad leadership that can see far beyond the bonds of what is, to what can be.”

“…..The motivation and training of multi-skilled employees withy relevant knowledge, skills and competence”

“……Contribution of employee through job challenge and empowerment.”

Planning and Control of Projects

Managers should must know the importance of establishing a vision, or mission for organization.

Must have clarification or organisational purpose and goals.

(Cole, 2004)

Should must aware of using of modern control techniques

(Planning, Scheduling, Microsoft project) etc.

Good Communication and New Technology

Reduction in operating cost

Increased flexibility

Improvement of quality of product and services

Increased control and integration

“………Since the system theory clearly relates the environment, people and the organization. The contingency theory recognizes that organizations do not operate under the same circumstances or with the same infrastructures. The contingencies depend on the market and technological environments which it operates; the appropriate approach is one which best suites the contextual and operational contingencies that apply.” (Child, 1984)

Linking management theories with practice

Managerial aspects of a building firm in Singapore may not be more much different from practices explained by management theories in the European countries. A recent study of site management conducted by Watson (2000) in the UK, find out that there are many managerial similarities between site practices in the UK & Singapore.

It therefore appears logical, to conclude that the styles for managing construction would not differ significantly even if the sites are located in countries with vastly different cultural attributes. The fundamental approach to management would still remain the same.

Also it is possible to link the Asian / Arab management style with modern-day management theories and practices adopted in the US and UK. Consequently, it may be invalid to say that the economic crisis in Asia was generated by the so-called specific Asian management style.

“Applicability of management theories”

“…….Implementation and applicability of management theories and practices has been a major concern of scholars dealing with developing country situations.” (Hoskisson et al. 2000).

“……..Researchers have been discussing this issue from situational perspectives. According to the divergence, mostly comparative management literature western management theories stop at the cultural border of each nation. According to this view culture is indeed the main source of management differences between developed and developing countries.” (Hofstede 1980).

“……Global researchers believe that there is no such thing as a universal theory of management (Hofstede 1993, Jaeger 1990). In contrast, those with universal view (Simon 1997) argue that culture does not limit the applicability of management theories and believe that there are similar management practices within organizations all around the world”.

For example, Mintzberg suggested certain global hypotheses that have been replicated in other studies (Ndiaye et al. 1996). Those with convergence viewpoint consider the degree of modern concept of industrialization as the major determinant for applicability of management theories (Lauter 1969).

According to convergence view European management theories may not be applicable in progressing countries, because rather than cultural constrains, the technical and economic difficulties in these countries are also an issue.

But according to Contingency theorists, hierarchy as the main determinants for the applicability of management theories, they consider different situational factors such as manager’s personality, firms’ ownership and sector (i.e. private or public) etc, to implement the management theories.


East meets west

Great theorists & thinkers from opposite end of the world interested in the same question:

What constitutes right and wrong and what behaviours contribute to a good ORGANIZATION?

The similarities in their conclusions are remarkable:

The value and importance of ideals – (dreams and visions)

The love of learning;

Our attitude towards of other people is important;

To understand others we must understand ourselves – humaneness;

We improve ourselves by improving others; _ (Managers, Coworkers & subordinates)

Relationships are the key to good working environment -goodness;


Information Technology (computers, etc).

Customers & Clients requirements ( reliable products).

Globalization (international markets).

Business Awareness / Competition.

International Standards & approaches.

Large Organizati


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