THE PROJECT MANAGER IN BUILDING CONSTRUCTION IS LIKE A DOG ON A CHAIN IN IMPERIAL ATTIRE

? Arch. Dipl.-Ing. Dr.techn. Alexander Ch. N. Muhm EMBA HSG

Solothurn, October 2018

Muhm’s concept of project management, which is very much like that of the Project Management Institute (PMI, 2004, p. 8) und Oisen (1971, p. 14) is the execution of the entire operative responsibility for the achievement of projective objects with regard to the functions, costs and set time limits. This is brought about through the systematic management of and supervision over all the project processes to be carried out in the initiation, conceptualization, planning and erection of a building. These processes are based on the well-founded multidisciplinary knowledge and skills of the specialists, who are grouped according to their disciplines and skills, and whose work is carried out in a co-operative network (Muhm, 2013, p. 71). In this article, a description is given of these tasks and duties, and deals especially with the participants who are involved within the project manager’s sphere of activity.

A project manager in building construction is understood to be the operative representative of the builder-owner and that, as such, he has been given the authority to act on their behalf, i.e. to make decisions which are in the interest(s) of the builder-owner and also has a controlling effect on the – (see Muhm, 2013, p. 64) – (four) core processes of what the project management refer to as the basic processes of initiation, conceptualization, planning and erection of a building. 

Der Architekten und Ingenieurkonsulenten für Projektsteuerung in ?sterreich (= Federal Chamber of Architects and Engineering Consultants for Project Control in Austria), the two concepts – Projektleitung (project management) and Projektsteuerung (project supervision) - as used in project management – will be subsumed (HO-PS, 2004, p. 3). Projektsteuerung includes the delegable performance of the builder-owner, such as (a) the task of clarifying issues, situations etc. (b) coordination (c) controlling tasks and (d) documentation (HO-PS, 2001, p. 4 f.). Whereas Projektsteuerung (without authorization) carries out all of the non-delegable tasks of the builder-owner – among other things, (a) determining which project objectives take priority (b) provision of the financial means (c) making definitive decisions with regard to the planning phases, to acceptance, etc. (d) conflict management, (e) perception of the central project starting point and (f) project-related representation duties (HO-PS, 2004, p. 5).

Project Manager

The concept of Projektleitung (project management) as described above remains unclear and is therefore to be rejected. Instead, and first of all, a clear distinction should be made between the tasks of the builder-owner and those of the project manager. Then the next step should be to define exactly the tasks of the project manager, which may vary from one case to another.

As the tasks that belong to Projektsteuerung (project supervision) do not need to be changed, they can remain the same. However, the conclusion should not be drawn that the project manager has to carry out the non-delegable tasks of the builder-owner. Even with authorization, non-delegable tasks remain, in accordance with their definition, non-transferable.

Rather, it is the responsibility of the builder-owner to (a) decide which project objectives are to be given priority, (b) provide the necessary financial means, (c) make definitive decisions concerning the planning phases, acceptance, etc. (d) make use of conflict management, (e) perceive the central project starting point and (f) fulfil project-related representation duties. The tasks (a) and (b) are always to be performed by the builder-owner. However, it is still the central task of the project manager to assist the builder-owners, to lighten the load as far as possible, with regard to the tasks (c) to (f), to lighten, i.e. the project manager should take over the greatest possible share of these tasks instead of the builder-owner, but as defined by the latter.

The task (c) ‘definitive decisions concerning the planning phases, acceptance, etc.’ could, be successfully delegated to the project manager all the sooner, the smaller the range of possible alternatives, i.e. the greater the degree of detail there is in a matter that has to be decided upon. In Muhm (2013, p. 33), the basic process of the building’s life-span (in which the first four basic processes represent the core process) is shown below in Figure 1 (publication in LinkedIn not possible).

Although the project manager has been authorized to act on behalf of the builder-owner, he cannot make any decisions on controversial issues in connection with the attainment of - or deviation from - the project objectives. Such decisions can be made only by the builder-owner himself or be dealt with by other participants in the project.

Authority and responsibilities

As defined by the builder-owner, the decisions that the project manager makes are, above all, those on controversial matters concerning the attainment of the project objectives in the planning phase, and thereby he guarantees the attainment of the same to the builder-owner. In the planning phase the degree of freedom in the decision-making process is much greater than in the erection phase of a building. In this case, and despite the possibility of having an authorization, the builder-owner must be at least consulted, if certain decisions are such that departures from the basic project objectives are to be expected. 

In the same way, the project manager is responsible for the decisions made with regard to the objective-oriented erection of the building. On account of the reduced degree of freedom in this phase, the possibility to deviate from the project objectives becomes increasingly less, so that the necessity to consult the builder-owner is no longer to the fore. Girmscheid/Selberherr (2011, p. 35) speak of a reduction in the intensity of the relationship between the builder-owner and whoever carries out the task and a gradually increasing autonomy of the latter. Besides these decision-making tasks in the planning and erection phases of the building, it is incumbent on the project manager to fulfil the special task, from a superordinate view, of recognizing deviations pursuant to the objectives set, and to taking the soonest possible measures to counter these deviations. This principle is valid also for the tasks (d) conflict management, (e) perception of the central project starting point and (f) project-related representation duties.

Participants

In the process of carrying out the tasks assigned to it, the project management does, in principle, influence all of the participants and players in the project. In Muhm, these are assigned to the following disciplines: Technology, Law, Economics and Project Management (Fig. 2; publication in LinkedIn not possible).

Especially the following players will be subsumed to the project management as they cannot be unequivocally assigned to one of the other disciplines, (a) builder-owner (building contractor, Investor, etc.), (b) public competence ((public) authorities and politicians each according to the local, regional or national significance of the project), (c) User of the building, (d) owners of adjoining property (those with party status in a legal procedure (e) others who are concerned, or declare themselves to be concerned (without party status in legal proceedings), and, under certain circumstances, (f) the mass media (Fig. 3; publication in LinkedIn not possible). The interaction with these is one of the most important tasks of the project management. The list shows that, from the standpoint of the project management and/or the builder-owner, the participation of these players may be unintentional and/or unwanted. Nevertheless, it is the task of the project management to interact also with these players.

In a research paper written in 2006 by Kolk/Pinkse (2006, p. 59) out of a total of six consolidating articles, three core tasks were recognized through contacts with important players: (a) identification of the kind of players (Mitchell et al., 1997; further Clarkson et al., 1994), (b) an examination to find out under which circumstances and how these players are able to influence the project with regard to decision-making and implementation (Frooman, 1999; further Rowley, 1997), and (c) developing (different) strategies with regard to their relations with these players (Savage et al., 1991; further Jawahar/McLaughlin, 2001). In a questionnaire carried out in 2009, Yang et al., 15 focal points in their relations with players were presented to a circle of participants consisting of 654 project managers in the building industry. The participants were asked to evaluate the importance of these 15 focal points.The three that were judged to be the most essential were: (a) social responsibility (economical, legal, and ethnic) in their relations with the players, (b) to ascertain what the needs of the players are with regard to the project and (c) correct and frequent communication in which the players are integrated (Yang et al., 2009, p. 341).

Builder-owner

The most important person in the construction-building project is the builder-owner, as without him, there would be no activity. However, it must be said that the role of the builder-owner in projects with urban dimensions are, in most cases, carried out by institutionalized investors, and the builder-owner, as an individual person, makes an appearance in only very seldom cases.In an interview with the periodical Projektmanagement aktuell, Kochend?rfer also ascertained that, these days, anonymous investors, such as real estate investment trusts (property and share-dealing companies) or institutional investors are the active players, and not the builder-owners as individual persons (Steeger, 2010, p. 11). The strategies of most of these voluminous real estate portfolios will be decided upon on a higher management level. Irrespective of the (legal) form (as trust, company or individual person), the builder-owner has to make his strategic decisions which are dependent, most of all, on the location, the market potential that might be expected of different transfer options (in principle, sale or leasing) and utilization options (as a flat, for business purposes, offices for authorities, etc.) of different kinds of buildings, as well as with regard to the risks that are attached. Financing conditions and other additional factors may also play a role in strategic decisions. Anyway, the objective of greatest importance is to get a good return on investment, which is long-term and with the greatest possible stability, after amortization of what is mostly a large share of the borrowed capital.

In project developments through institutional investors, the builder-owner (trust or company) is, as a rule, represented by a strategic (project) management of the relevant company. In large-scale projects with several investors, a company is often founded for their own purposes, and with its own executive board, to which each investor sends his own representative.

Thus, between two management levels there should be, on the one hand, the project management which carries out the operative representation of the builder-owner, and is responsible to him for the fulfilment of the objectives which are attained through the core tasks concerning functions, costs and set time limits. On the other hand, there is the (abstract) strategic management which, in different ways (as business management, portfolio management, and in seldom cases, also as an individual person, etc.) carries out the task at hand in accordance with the (classical) function that the builder-owner holds. In this function, he has to start off the project, and is thus responsible for finding suitably qualified persons for the project management, the availability of resources, the formulation of the project objectives, the strategic supervision and for making the right decisions.

Public decision-makers

With regard to the public decision-makers, a distinction is made between the authorities (that section of the executive which is subject to directions i.e. those civil servants who carry out the laws of the land) and politicians (as leaders, the legislative, and who have to participate in general elections) The inclusion of the authorities, if possible already during the initiation phase, allows, on the one hand, the rash recognition of what is required (from the viewpoint of the officials) to be given authorization to carry out a project. On the other hand, the functional requirements of the project can be better communicated to the officials, and if there is the necessity for any change, prompt reaction is possible.

It is the business of the project management to carry out this voting. The officials and their interpretation of the laws are essential for the success of the project. The knowledge of the specialists as a quality control is often underestimated, so especially in the individual specialist fields, such as fire prevention, prevention of water pollution, labour inspection, etc. highly qualified specialists to be found. An early inclusion of such persons can, besides the technical facilitation, also lead, through the selection of other than initially intended technical solutions, to a saving in costs or that more space is won.

The need for such voting can, in principle, come about on all hierarchically arranged levels of the instances that issue authorizations. It is the task of the project management to recognize this and then to organize and carry out the corresponding voting.

Buildings of extensive size have always aroused political interest and controversy. However, unlike the official authorities, the politicians tend rather to react according to public opinion, or indeed to campaigns organized by members of the public. It happens repeatedly that a project, which is in itself interesting, comes into the crossfire of political debates and subsequently has to be discontinued, because well-balanced arguments in favour of the project have been suppressed by one-sided representation. Therefore, it is worth finding out as soon as possible if there is any objection against the project, and then to react in a professionally appropriate, legally well-considered and communicatively open way, so that a well-balanced attitude can develop and subsequently the acceptance of the project by all of the principal political groups. The integration of all those who are only indirectly involved in the project is practically impossible.

Whenever it becomes known that a large-scale building is to be erected, there are always politicians who are in favour of the project and those who are not. The latter can first endanger a project when the political representatives of a political majority win an election, or if they succeed in mobilizing a sufficiently large proportion of the public who are against the project to join them in their efforts. For this reason, every time a project is developed to construct and erect a municipal building of some size, a tribute has to be made to the public. This may be in the form of a freely accessible and attractively laid-out playground or recreational area, facilities for artists, a number of low-income flats and other benefits. It is essential to be aware that, in almost every country, building rights are used within the framework of political processes. Nonetheless, it can be assumed that although there is often opposition especially with regard to a large-scale project, intensive building activity guarantees the economic growth in, and thus success of, a region.

User of the building

The demand that is expected of the potential user of the building is the reason for its erection. The user acts rationally in the sense of the project, as far as he/she can profit from it. The positive attitude of the most important players can induce the other players to have a positive opinion. In project development the term anchor tenant is widely used. The term anchor tenant is defined as: a large and prestigious department store prominently sited in a new shopping centre (Reference: anchor 3. Oxford Dictionary of English, 3rd edition 2010, p.57). An anchor tenant is understood to be the tenant with whom the supplier can, with the greatest probability, rely on to guarantee a medium to long-term minimum rent income, and also be a magnet, i.e. a public attraction. In shopping centres, this may be the branch of a chain store selling, for example, foodstuffs or textiles. A project profits from the attractiveness and the high frequency of customers of such a tenant, as his customers are also potential customers for the other suppliers in the shopping centre. In the development of office buildings the same principle is used. The key tenant embodies the targeted image of the project, and serves as a guarantor of its success. One can say that this kind of tenant has the function to be exemplary. Quite often, the project developer offers financial incentives, such as a reduced rent for a certain period of time – or indefinitely, higher quality standards, contributions to the interior extensions, etc., to win over an anchor tenant.

Now and then, the builder-owner, investor, and user in a project are from the same company. Such is very often the case in office and industrial buildings. Of these, there are also cases in which the business management of the company has not only the role of the builder-owner, that of the administrative board of the investors and the co-workers of the firm / company, but also that of the user. On account of the special relationships between these players, the organization of such projects is difficult, especially when the project management is also accommodated in the company. To coordinate the different interests of those involved in such a self-contained and closed system requires more adroitness than when these three roles under company law are carried out separately by three persons.

Owners of adjoining property

Owners of adjoining property and others whom the project concerns  differ pre-eminently in that only the former have the status of being parties in the legal proceedings to be given authorization for the building project to be carried out. The influence of these players on at least the set time limits of a development is often very great. Especially not only through those who are entitled to raise objections at such proceedings, but also through those who are not entitled to do so, the delay(s) that this may incur increased costs. When the number of persons affected by the project, or those who claim to be affected, is large enough, this can have a considerable influence on the development of the project, even if they do not have the official status of being a party to the proceedings. In the development of many projects, an attempt is thus made to be rather cautious when communication is required. However, this very often has just the opposite effect to that which was desired. The lack of information often gives rise to anxiety, and the anxiety of many can lead to reactions which are difficult to keep under control. As a consequence, there is the phenomenon of group dynamics, i.e., those who are sceptical of the need for the project or reject it because of their own personal interests can form a group (or groups) which interact and thus have the power to exert pressure on political representatives. Previously, the individual felt helpless, but now, in an organized group, a dynamic force develops that should not be underestimated. If the pressure is too great, this can mean that the project has to be stopped.

What has been was most impressive over the past few years is the power of the public, and the failure of a project – of course, considered objectively, under very difficult framework conditions – as can be seen, for example, with regard to the plan to reorganize Stuttgart’s railway junction (Stuttgart 21). Although all authorizations, permits etc. had been obtained, the work that had just begun was forced to stop through groups, which had been mobilized by public opposition and who made the claim, as if it were obvious to all, that they were representing the majority of the public who are against the project. Only after a development period with many conflicts and then the referendum held on 27th November 2011 to ask the public if the Province should withdraw from the project or not, did the matter become clear. The withdrawal was negated by 58.9 % and so the realization of the project was thus guaranteed (Statistik-bw, 2012).

In an interview, Frank Brettschneider reported in the magazine Projektmanagement aktuell on what he considered, from his point of view, to be the apparent errors in the project management of Stuttgart 21. Over the years, the project management had displayed a particular resistance to take into consideration the requests and concerns of the public, and the contradictory statements circulating between the body responsible for the project, the rumours and justified requests or concerns of individual groups of inhabitants were given too little attention. Those belonging to the body responsible for the project were not only at variance with each other, they were also too cautious and brief when information was required. The negative attitude towards the project should have been recognized much earlier on, and an appropriate reaction should have followed. That the concerns and anxiety of the people were not taken into account, the fact that information was made available only under pressure, and the refusal to participate in a dialogue seemed to justify public opposition, and would, sooner or later, lead to escalation (Steeger, 2011, p.13 ff.).

An inclusion of the owners of adjoining property and others affected by the project should be made at a very early stage and can, indeed, have a very positive effect if the body responsible for the project or otherwise the project manager, is able to react in an appropriate way. This can avoid delays and thus save costs. In an interview, published in the Frankfurter Allgemeinen Zeitung on 11th December 2012, the chairman of the executive board of the Deutschen Bahn, Rüdiger Grube, stated that a share of the present additional costs in the project Stuttgart 21,.- which increased from. 4,2 millionen Euro to 6 millionen Euro – were partially incurred through the delays caused by the oppositional activities of the public (Schwen, 2012, p. 13).

The most practical and appropriate way to include those concerned is the procedure by which those involved can be selected as having a justifiable reason for being against the project. This helps considerably to avoid or at least to reduce risks, but requires time and binds capital. That is why this procedure is seldom used. Through modern organization the interests, the requests and concerns of all those stakeholders who declare they are affected by the project can be registered, so that a profile can be made of their needs and wishes. The body responsible for the project can then take these into account, which allows the further development of the project to continue with the consent of all concerned. 

Mass media

The mass media can also play a considerable role. For the project management, it is of importance that they get to know the ideological orientation and political involvement of the most influential media in the region, in which the project is to be carried out. In this way information that is aimed directly can be more easily placed, and it is also easier to respond and/or make a criticism of the project. In large-scale projects, there will be a communication department of their own which is responsible for these tasks. The management makes the relevant information available to this department, and then the communication is passed on to the public by the press speaker. For the positioning of the project in the relevant marketing niche, the mass media, if they are well-informed beforehand, can be extremely helpful. Through the press releases, reports can be made of the current situation and progress of the project, the marketing success to date, the date when construction begins, etc., and thus allow the public to be kept informed and up-to-date in the project activities. Should objections against the project be raised, the matter will almost always be dealt with through the mass media. In such cases, the value of a functioning communication department will then be noticeable. A detailed concept of communication with a clear and uniform use of language on the different themes is an indispensable aid to answering questions, as well as responding to reproaches and verbal attacks. It is an important contribution of the project management to the successful project development, to take care that the public communication concerning the project is factual and to the point, and that polemic duels do not take place. This is not always easy, because if a serious dispute is made public, the number of copies sold by the mass media who report this goes up considerably, and certain groups, which represent only a minority, may think that this news promises more success than a factual discussion.

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