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Part 1
Why is an understanding of people and organisational
management theory important for your profession?

How can Management Theories help meet the key

challenges of the 21st century?

Why is an understanding of people and organisational
management theory important for your profession?

Organizational studies, organizational behavior, and organizational theory is the

systematic study and careful application of knowledge about how people - as individuals and
as groups - act within organization (
Motivation is the main force through which individuals allocate effort to generate and
implement innovative ideas. However, employees are only motivated to go beyond their
designated role and get involved in spontaneous and innovative activities if they have a
strong identification with the organization. Organizational culture plays a critical role in
motivating innovative behavior, as it can create commitment among members of an
organization in terms of believing in innovation as an organizational value and accepting
innovation-related norms prevalent within the organization.

People are at the heart of any organization and a good understanding of how they interact
with the structure as a whole is an essential ingredient for an organization’s success,
evolution of management theories, environmental forces, strategy, organization structure,
work groups, organizational culture, leadership, motivation and personnel management

The organizational theory can be divided based on their development stage. In the earlier
development stage or the classical approach, some the famous and main advocates are
Maslow, Frederick Winslow Taylor, Henri Fayol, Max Weber, Elton Mayo, Douglas
McGregor, Gilbreths, Henry Gantt and etc. Some of the major contribution is improving
production efficiency (Robbins, 2005). Their organization theory was meant for their time as
it was labor intensive and their approach motivated the labor to be efficient. Henri Fayol and
Max Weber helped with the development of general administrative theory. Fayol specified a
list of of universal such as planning, organizing, commanding, coordinating and controlling.
Fayol has Fourteen Principles of Management while Weber’s Ideal Bureaucracy is still used
as reference for all management learners. It is used a reference for many organization
concepts. Here we can see that it is importance to match people to their job and train them
in how to be more effective on these jobs. They have make us realized that there is “one
best way” in doing the job. However many of these management theory are not applicable to
the current situation as there are massive technology development that improve the ways
things are being performed.

Although Maslow’s need hierarchy has received limited empirical support, it is used widely in
Management primarily because of its humanistic origins, intuitive appeal, and ease of
understanding for organization members. When applied to organizations, the theory
sensitizes managers to the full range of needs that can motivate members, particularly those
needs at higher levels such as social needs, esteem, and self-actualization. It encourages
them to consider more alternatives for motivating members than the traditional incentives of
money and job security which mainly satisfy needs at the lower end of the hierarchy. This
has led to a variety of Organizational Development interventions aimed at satisfying
members’ higher-level needs including job enrichment, self-managed teams, employee
involvement, and career development. There is considerable evidence to suggest that when
organizations provide opportunities for satisfying all levels of members’ needs, they are more
likely to attract and retain talented people who perform at high levels (Pfeffer, 1998).

The next stage for development for management theory which is more relevant to the usage
of the current time is process, systems and contingency approaches. The process approach
was originally introduced by Henri Fayol which is based on management activities such as
planning, organizing, leading and controlling. Next the system approach defines as a set of
interrelated and interdependent parts arranged in a manner that produces a unified whole. It
illustrate that the organization constant interaction with its environment, which can result in
negative entropy or synergy. While stakeholder is group that are affected by organizational
decisions and policies. This approach recognizes that organizations do not operate in
isolation and their survivals depend on its interaction with the internal & external
environments. In addition, the contingency approach also known as situational approach
has been used to replace simplistic management approach. Contingency approach sees
study of management is logical and organization is diverse therefore there is no one best set
management skill for the organization.

Thus, the project manager's job is regarded as coordinating a process of interrelated

functions, which are neither totally random nor rigidly predetermined, but are dynamic as the
process evolves. The project manager job is linking the organization with the various
environments. For the construction industry, we can relate it to various environments such
as company stakeholders, labor, sub contractor, building materials, architecture, government
and many more. The project manager will ensure maximization of efficient resource
utilization through procurement of labor, materials and equipment according to the
prescribed schedule and plan. A proper management will ensure Implementation of various
operations through proper coordination and control of planning, design, estimating,
contracting and construction in the entire process. Lastly the project manager will develop

effective communications and mechanisms for resolving conflicts among the various

The project manager must be able to exert interpersonal influence in order to lead the
project team. The project manager often gains the support of his/her team through a
combination of the following:

• Formal authority resulting from an official capacity which is empowered to issue

• Reward and/or penalty power resulting from his/her capacity to dispense directly or
indirectly valued organization rewards or penalties.
• Expert power when the project manager is perceived as possessing special
knowledge or expertise for the job.
• Attractive power because the project manager has a personality or other
characteristics to convince others

As many parties are involved, dispute is most likely to happen. Great concern has been
expressed in the recent years regarding the dramatic conflicts and disputes in the
construction industry in the world and as a whole. With good organization and management
skill these manager can source for better alternatives and resolution methods on how to
manage dispute.

In the construction industry, with understanding of the human and organizational behavior
will to assist in the search for the most appropriate ways of improving performance and
effectiveness. We are able to analyze their workers’ behaviors and weak point. Each
weakness can be use as a positive point to enhance their work performance. This will
ensure the optimum performance of the workers.

The management process approach emphasizes the systematic study of management by
identifying management functions in an organization and then examining each in detail.
There is general agreement regarding the functions of planning, organizing and controlling.

It focuses on those managerial actions through which the importance of innovation may be
communicated and innovation-related behavior may be induced and reinforced. Project
constraints and regional separation may diminish the motivational effects of managerial

actions in construction firms. It is concluded that a culture that motivates new solutions and
innovative improvements in particular first of all prevents ideas from getting lost in daily
business and within the organization. To overcome the many challenges in life and work
space we should start giving immediate feedback, providing communication channels for
implicit knowledge, allowing for autonomous work and task identity, initiating innovation
projects and using a comprehensive reward and incentive system are appropriate
managerial actions in this regard.

How can Management Theories help meet the key challenges of the
21st century?

The construction industry of today is both similar and very different from that of twenty years
ago. In terms of the former, many processes, operations, and practices have changed very
little over the last several decades. While technology is slowly modernizing activities such as
project management, field activities still have a great resemblance to traditional processes.
In contrast, the forces on industry organizations continue to change at a rapid pace.
Influences such as globalization, evolving delivery mechanisms, and changing organizational
structures require business decisions that challenge the traditional transactional focus of the
industry. Given these changing business influences, the issue that is emerging for the
construction industry is one of leader preparedness. One primary concern for the
construction industry over the next decade is the development of leaders at all levels of the
organization who have the knowledge and skills to address rapidly changing business
environments. Leadership ability to transform organizations in response to dynamic market
forces is essential for sustained success within the construction industry. Additionally, the
ability for leaders to both motivate the internal workforce as well as communicate to a
diverse project team is a challenge to individuals to develop their interpersonal
communication skills.

One of the important management factors that required for the 21st century is Emotional
Intelligence. Research for Emotional Intelligence was gaining momentum and from this time
period the early publications on emotions as intelligence were introduced. EI is defined as:
an array of non cognitive capabilities, competencies and skills that influence one’s ability to
succeed in coping with environmental demands and pressures (Bar-On, 1997). This is
relatively a new concept that will assist the manager to overcome challenges in the industry
and improve their leadership ability.

Another key performing for the construction industry in the near future is that it is slow in
acknowledge the benefits of IT and technology in managing the workload. This trend has
been emerging since 1960s world wide. There are many computer and IT infrastructure that
can be used to enhance the value of construction such as Auto Cad, Artificial Intelligence,
Object Oriented Computer-Aided Design and Drafting (OCADD), Primavera and Microsoft

Another important area that is benefit of the organization is the presence of Knowledge
Workers. Knowledge workers as a group currently make up to about one third of the U.S
workforce-individuals in jobs that are designed around the acquisition and application of
information. As these waves influenced society, so too have they affected how we do
business. International markets, technological improvements, e commerce, changes in
workforce composition, and the like are giving rise to new organizational issues. Therefore
the most important factor to overcome challenges in by encouraging the workers to be more
independent, gain new knowledge to overcome the many challenges in life and work space.

Globalization is new threat to every organization; the next step would be to follow the trend
of the other organization and seek new opportunity in untapped market. For construction
industry the best place now in new market are in the countries with emerging business such
as Middle East, Asia and South East Asia. As the global financial crisis had just begun,
these market are the least affected by the global trend as their economy are still under
emerging business.

In the near future for the construction, there need to have a solid foundation of of Information
Technology. This is in line to support the new challenges such as globalization and
knowledge workers in the construction industry. The core Information Technology framework
roadmap defines the availability, development and deployment of third party application
services, together with the construction environment as follows:

1) a cost competitive ICT Infrastructure

2) a well defined policy and regulation framework to build trust and confidence
3) Essential ICT Infrastructure services and applications to enable broad based
community usage and sector-specific adoption of EC
4) Constant enhancement and introduction of new, innovative and leading edge ICT
infrastructure services.

ICT (Information Commerce Technology) will ensure that there is a well standard guide lined
database of the company’s history. This will help the management and stakeholders to
analysis and evaluate the key performing index of the company before making important
decision on their business.

Finally by understanding the management theory we are able to apply the important
elements in our daily work to reduce stress and ensure an optimum productivity for each
task and position we are handling in the future.

A reflection of your own management competencies

Management Competencies that is important is my personnel style are:

Stress Tolerance: Many people involved in construction would concede there is stress
associated with the majority of jobs in the industry. There is pressure to complete a project
within a specified time and financial budget. In addition there is risk involved in undertaking a
construction project because of the uncontrolled nature of the sites. Each project is different
and has unforeseen conditions associated with it. Also there is financial pressure because
profit margins are historically low reducing flexibility to make mistakes and still gain
financially. Stress management is important for me to ensure I would be able to manage the
project effectively.

Independence: A high degree of self-confidence provides confidence and the ability to

make decisions. To think independently as well as involve others in my decision-making
process is important for a better and committed decision by various parties. These are
undoubtedly characteristics strong construction leaders need to be successful.

Optimism: Finally, optimism. This characteristic shows the way I regards the future. This is
important as there is a current and on going Global Financial Crisis therefore the economy
was uncertain and beginning a recession. However there are still room for development for
the construction industry for example in Middle East and Asia. The Middle East where I am
currently based is still a booming economy as there are many high ended property
developments. Few years in the near future, construction industry and the rest of the
economy received a boost due to needs for property expansion.

Management knowledge that I would need to develop further are:

Technology: The construction industry currently is facing heavy reliance on a large pool of
unskilled labour. The industry is labour intensive and backward construction techniques and
practices. In addition there are poor safety performance and high wastage due to reworks
and misleading specification. With usage of technology it will ensure better utilization of
resources and faster turnaround time.

People Management: and Teamwork: The stake holders of the construction industry have
different needs and their requirement needs to be my key performance index for the
following year. For example the senior management level needs to my talent to manage the
project as supervisory role for them. I would need to advice them on the risk and profitability
of the project towards future of the organization. For the middle level management my role
would be a role model to ensure all documentation and procedure are in place to ensure a
smooth transition on every stage of the project. This includes building good working
relationship with colleague, sub contractor, buyer, finance dept and other related matters.

Stress Management: There will be stress in every phase of our life from growing up till the
time when we return to God. By understanding each stage of changes in our life we are able
to cope with the stress. After over coming each phase in our life we are able to ensure the
mistakes that we made previously and becoming a better and more understanding adult in
work, relationship and family matters. Good stress management can help us ensure a
healthy life style. Various ways that I can relief myself are by spending time with my family,
jogging, eating good supplements and many mores. By understanding my own weakness I
am able to reduce the pressure on me and improve my lifestyle.


• Stepthen P.Robbins and David A.DeCenzo (2005), Fundamentals of

Management, Essential Concepts and Applications, International edition,
Pearson Prentice Hall, USA

• Richard L. Daft (2006) Management, 6th edition, South-Western, USA


• Cole, G.A. (1996) Management Theory and Practice, Letts Educational, London

• Bar-On, R. (1997). The Bar-On Emotional Quotient Inventory (EQ-i): A Test of

Emotional Intelligence. Toronto, Canada: Multi-Health Systems.

• Pfeffer, J. (1998) Putting People First. Boston: Harvard Business School Press