Wednesday 27 February 2013

Project Organizational Structure of Highway Contractors


The transport project has specific characteristic, thus, project organization structure in the highway construction is more specific than any other projects. At present, almost transport projects have many problems in quality, delay, over budget, environmental impact, traffic safety, etc. Some of the major causations come from the project organizational structure. Project cannot run smoothly and efficiently in case its structure is not effective. In fact, there are some common problems relating to project organizational chart as follows:

·  The project organization structure is not flexible enough for project staff some employees did not meet the assigned requirements.
·   Role and accountability were not clear and detailed enough. In many cases, the staff members are ambiguous about what issue they needed to solve by themselves and had accountability for their decision making. Besides, some decisions were not made in timely manner. These affected so much to the efficiency and effectiveness of the project.
·   Sometimes, the coordination within the company department; or the communication between the company and the project management office (PMO) on site are not close and smooth. It takes risk of interruption and brought the potential risks for the project.
·    There are some traffic accidents happened on the construction site because the PMO only focused on the construction safety, and did not pay attention to the traffic safety. When the traffic accidents happened, a lot of legal issues arise and affected so much to the company as well as project.
·   The reward system and training program are not given importance. This limits the staff motivation and competence enhancement.

Understanding the organization issues and finding out the appropriate solutions are the best ways for enhancing the project's success and the employee's competence as well as contributing to the sustainable development of the company.

Mr. Pham Hai Chien made a case study on National Highway No.51 Project aimed to: (i) study organization and project structure for a highway construction project; and (ii) Make recommendations for improvement of weaknesses, problems and obstacles.

Conclusions

By focusing in in-depth analysis of the organizational structure of the contractors, who undertook to deliver the 13th and 14th packages of the national highway No.51 project, ​​the report demonstrated the importance of organizational structure to the project performances. Simultaneously, the report clarified the key factors affecting the project structure and the specific solutions that managers need to keep in mind when designing an organizational structure as follows:

1. Roles and accountabilities.

The report indicated that the role and responsibility are the fundamentals in organization structure. The organizational structure can only work perfectly based on the roles and accountabilities which are clarified in detailed, comprehensive and clear. If not, many conflicts might happen during the operation of the organization and project. Thus, the goals and objectives of the company and project cannot be achieved.

2. Coordination and cooperation.

Coordination among departments and between the staff members always matters, which the company must concerned about. There are many factors affecting the coordination and cooperation, and one of the factors is the organizational structure. Each organizational structure has its own strengths and advantages. Therefore, depending on the characteristics of each project, the organizational structure needs to be designed and set up in order for the departments and individuals to coordinate and cooperate most effectively. The report demonstrated why the matrix structure is a typical example that is often

3. Project governance.

Beside a good project structure, the project governance is also very important to ensure the success of the project. The report pointed out that transparency, clear structure, clear role and accountabilities are the important factors in the project governance. Additionally, it is necessary to apply four key principles of project governance to ensure that project governance is more effective and efficient.

4. Problems and obstacles occurring within the structure.

Based on the weaknesses of the project structure, the report analysed in-depth the core problem occurred. These are typical problems which the traffic projects often encounter. Beside some solutions are supported by the theoretical framework, some other solutions come from the experience of the PMO. The traffic contractors can apply these experiences to manage the future project more successfully.

5. Lessons learnt from the strength and weakness.

There are many other lessons learned during the construction process, but this report only focuses on the basic lessons relating to organizational structure has been and will happen in the key traffic projects such as the national highway No.51.


The construction companies need to pay special attention and must consider the following recommendations when designing an organizational structure of own business in order to achieve the agreed strategic objectives.

1. Set up the good structure according to the right policy and strategy.

When the economy falls into a spiral of crisis, the companies often tend to change the business strategies in order to adapt with the crisis and to overcome difficulties by restructuring the organizational structure following the new business strategy. This is because the structure is the skeleton of an organization or a project. In case that is a good project structure but does not match the right policy and strategy of the company, the structure cannot run smoothly. In contrast, a good structure in accordance with a failure business strategy of the enterprise does not still ensure the project success. Two factors always interact and complement each other as a precondition for the success of the project.
Set up the project structure based on characteristic of each project with careful consideration. The previous project structure is only a consultation, not a final choice. After that, analyzing in-depth, incessantly monitoring and revising the project structure to ensure that it always follows the current policy and strategy of the company.

2. Appoint the right person to the right position.

People are the heart of all issues. Until now, the personnel activities are never easy for any enterprises. While choosing a good staff is too difficult, appointing them to the right position for maximizing his ability is never simple.

Based on a good recruitment process, the advanced training programs, the clear, detailed and comprehensive personnel policies, transparency, and the effective enforcement of the personnel policies, the firms will hold a huge advantage in the operational activities and the project delivery.

3. Set up and enforce effectively and efficiently the project governance.

i. Jean-Daniel Gerber (2004) stated that “Good governance doesn’t fall from the sky; it must be learned, practiced and enforced”.

ii. A successful project needs the effective project governance. There are many perspectives, approaches, and structures in the project governance. Base on the organizational structure and policies of the company, the firms should set up an appropriate project governance structure, then apply and enforce them effectively to achieve the required objectives.

4. Attach special importance to the traffic safety.

i. Vietnam is one of the countries with the higher rate of traffic accidents in recent years due to severely degraded transportation infrastructure, while the awareness of the traffic participant is still poor. Moreover, the contractors of the traffic project usually do not pay attention to traffic safety for vehicles circulated on the project. Therefore, most of the traffic projects often occur some serious common traffic jams and traffic accidents. Many contractors have been sanctioned, even prosecuted criminal.

ii. Setting up a good safety team; establishing a detailed and comprehensive project safety plan; and enforcing efficiently the safety plan are the best solution that the traffic contractor needs to follow in order to achieve more the project’s success and avoid the legal issue because of the traffic accidents.

5. Doing right at the beginning makes a good ending.

i. In the field of management, doing right at the beginning, doing right from the smallest things are the key to success, however it is not easy to take. For instance, in all stages of project implementation, or in case the important issues need to be executed immediately, the commencement meeting is extremely important. The opinions and reviews in this meeting are as a basis for doing right at the start, minimize the potential risks during the implementation in the future. The final reported meeting is also essential to assess the results of implementation and draw experience for the upcoming projects.

ii. Trying to do right at the commencement, trying to do right from the smallest are the best way for the companies and the project managers towards the fully satisfactory results.

Finally, there are no any theoretical frameworks, or solutions to be accurate in all cases of the organizational structure. However, the analysis and recommendations in this report that are fundamental approach for any construction companies can be applied in a flexible manner through the specific characteristics of the business, or the projects. Understanding this approach, the firms will be easier and more successful in designing their own organizational structure.

His thesis abstract is copied and pasted.


Vietnam has maintained an impressive growth in infrastructure and its services since the early 1990s, especially in transport network development. After becoming a member of the World Trade Organization, the Vietnamese firms face to not only their domestic competitors but also the foreign companies. One of the most critical factors decreased the competitive competency of Vietnamese firms came from organization structure and design. This final report focused on the project organization structure of the highway contractor. According to the organization theory from literature review, this report analyzed how the organization theory is applied in the real project of Vietnam national highway No.51 as well as addressed the problems and obstacles occurring throughout the project. Some lessons learnt from project and recommendations are discussed in order to help the project managers to improve their project management competency in term of the organizational structure.

Tuesday 26 February 2013

Contract Project Risk Management Strategy in an Unstable Market Situation in Vietnam

Based on the preliminary data of the market research company property (real estate) in HCM City, more than 90% of real estate projects in HCM City are behind schedule, in which, an estimated 70% of the construction project stopped. The provinces and cities such as Hanoi, Da Nang, Can Tho, Binh Duong, Dong Nai, BRVT, and Long An have the same situation as in Ho Chi Minh City because of lack of investor, while customers demand decreased significantly due to the decline of the economy and markets. Therefore, investors opted to stop the project until the market and customer needs restoration while some chose to slow down the construction to complete the project as the market and customer needs recovery.

Mr. Nguyen Truong Hung made a case study on the Canary Resident Phase 2 Project in the Proposed Guocoland Mixed Development at VSIP I Thuan An District, Binh Duong Province which aimed to: (i) use research data of the contractor, and build in aspect of contractor’s perfective; (ii) study the behaviour of project owners during slow construction market; (iii) study risks of contractor affected by Owner and market; (iv) study risks management (in term of solutions and strategy); (v) discuss the strengths and weakness of the solutions; and (vi) propose recommendations on risks and solutions.

Conclusions

Risk management is an integrate part of project management. Therefore, risk management should be executed immediately at the commencement of the project and must maintained throughout the course of the project implementation process. Risks can occur in any phase of the project. Contractor cannot avoid risks; however, if the contractor strictly implemented the risk management system, risk can be minimized, transferred or retained. There are several ways to deal with risk such as transfer the risk to another party, avoiding the risk, reducing the negative effect of the risk, as well as accepting some particular or all of the consequences of a particular risk. The active and early identification, analysis and evaluation of risks can reduce its impact and will ensure the feasibility and efficiency of the project. The benefit of risk management as well as effectiveness of project management is to save time, avoid cost overrun, ensuring project completion as planned schedule and with good quality.

This report listed the behaviours of investors occurred in construction projects in Vietnam when the economic and market declined leading to Owner’s economic risks, and unstable market situation in Vietnam. This report also identifies the major risks that construction contractors have occurred in the construction projects, many risks occurred in the construction phase, especially in the economic and slow market situation period. However, the report only give particular serious risks occurred for construction sector in Vietnam due to impact of economic difficulties and sharp market decline which really affected the contractors.

As a result, the report described how contractor analyses manage the risks, and their strategy to overcome the risk. This also highlighted strengths and weakness of contractors when they implemented the risk management system, and suggest solutions as well as give recommendations to manage risks as shown in the tables below.







In order to minimize the risk in each specific case, the main contractor used a lot of negotiation strategy, particularly the cooperation among the parties including investor, main contractor, suppliers and subcontractor which are important in the chains. They must cooperate; share the risks and work together to overcome the risks in order to overcome the market difficulties.


His thesis abstract is copied and pasted below.

Abstract

Construction business and Real estate business began to face difficulties since the first Quarter 2010 due to European economic downturn has affected foreign investment FDI in Vietnam to decrease, and interest bank rate is too high , and significant GDP decline has direct impact on the construction on the construction sector and real estate business. Investors face many risks in the project and this has indirectly affected to contractors, suppliers of projects. Therefore, risk management, especially risk management due to difficulties economic and slow market situation as to be appreciated in order to minimize the risks.  

Risks cannot eliminated, however, if contractor implementation of strict risk management system, risk can minimized, transferred or retained, There are several ways of risk dealing such as transfers the risk to another party, avoiding the risk, reducing the negative effect of the risk, as well as accepting some or all of the consequences of a particular risk. The active and early identification, analysis and evaluation, with control measures and reduce the impact of risk is urgently needed to ensure the feasibility and efficiency of the project. The benefit of risk management as well as effectives of project management is save time, avoid cost overrun, ensuring is project complete on schedule as planned, and good quality.

This study listed Owner behaviours often occur in construction projects when they encounter difficulties in the market, and contractors in risks management strategy to overcome the risks due to operating through the construction projects.





Friday 22 February 2013

PROFESSIONAL MASTER PROGRAM IN PROJECT MANAGEMENT SPECIALIZED IN CONSTRUCTION (MPM) Intake 2013



PROFESSIONAL MASTER PROGRAM IN
PROJECT MANAGEMENT SPECIALIZED IN CONSTRUCTION (MPM) Intake 2013




Introduction
 The Project Management in Construction field of study trains professionals to play a leading role in the international construction industry. It molds students to become active leaders in the construction industry and large construction project.  The program prepares for students:

-    To become outstanding managers and decision-makers familiar with the modern techniques  of construction management, engineering management and infrastructure management.

-    To more competent and capable to manage international large construction projects

-    To be able to assist the corporation to install and develop project management system in a company


 Main Features of the Program
       One year professional AIT Master’s degree.
       Credits can be accumulated over two years
       Certificate course works
       International field trip to the large construction sites in the region
       Study language: English.

Program Structure
 AIT Professional Master Program is designed for those engineers who cannot leave their work while following a master program. The program is conducted in one year. To complete the master program, participants need to complete 11 courses and 1 project report with total 33 credits.

In the first two semesters, students will take basic and advanced courses selected in consultation with an academic/thesis advisor from among the regular courses offered at AIT. During the third semester, students will carry out their project study. Students will conduct international field trips:

-          First trip: Study at AIT

-          Second trip: visit to the large construction sites outside Vietnam, such as Thailand, Singapore, Malaysia, Indonesia, China and Taiwan or do internship in AIT Thailand

-          Third trip: to AIT to attend Graduation ceremony
AIT certificate can be given for those students who would like to register for a course offered of the AIT Professional master program. Credits gained from certificate courses can be transferred to AIT Professional Master Program.



English Entry Requirement
 AIT is an international institute with English as the sole language of instruction. Admission to AIT requires proof of English language proficiency which may be satisfied in any requirement of the following:
·                     IELTS (4.5)
·                     TOEFL (Paper -based: 500; Computer - Based:173; or Internet - based: 61)
·               AITEET. Applicants can apply for English Test offered by AIT at AIT-VN. English Test fee:  420,000 VND.

Entry Requirements
 To be eligible for admission to the AIT Professional master's program, an applicant must:
·              Hold a Bachelor degree (normally from a four-year program), or its equivalent, in an appropriate field of study.
·                     Have undergraduate grades significantly above average.
·                     Have good command of English
·                     At least three year of working experiences
Application form can be downloaded at www.aitcv.ac.vn . Application submission fee:  420,000 VND. This fee is paid to AITCV when applicants submit the application documents.

Teaching Schedule
 The program is conducted during non-working hours (weekends and evenings)


Faculty  
 Faculties are from Construction Engineering and Infrastructure Management (CEIM) program – AIT and professional experts from industry. CEIM is highly experienced in project management education, from short training programs to master programs, doctoral programs and post-doctoral programs. So far, there are more than 300 masters and 12 doctors graduated in Project Management program and more than 500 trainees from short training programs received certificates offered by CEIM. CEIM also have its strong partnership with government’s construction organizations and industrial zones in providing consultancy services and professional researches to enhance the quality of construction projects.

For AIT Faculty’s profile, please refer to www.set.ait.ac.th/ceim


Curriculum

No
Code
Course
Core course:
1
CE70.12
Organizational Management in Construction
2
CE70.21
Integrated Project Planning and Control
3
CE70.11
Project Cost and Financial Management
4
CE70.44
Communication and Negotiation skills for Project Managers
5
CE70.33
Safety and Health Management in Construction

6
CE70.22
Legal and Contractual Risk Management
7
CE70.43
Project Financing
8
CE70.13
Quality Management

Applied Project Management courses

9

Applied PM in Construction Business and Project  Simulation
10

Applied Project Management in Highway Projects
11

Applied PM in High-rise Building Projects
12

Applied Project Management in Housing and Real Estate Projects
13

Applied Project Management in Commercial Projects
14

Applied Project Management in Public Infrastructure Projects
15

Applied Project Management in Petrochemical Project



English Training Program
 AIT-VN  will conduct 8 weeks intensive English Training for those who need to improve their Academic English Skills before joining the program. The English Training Program also guides participants how to conduct AITEET.

Language
The program is conducted in English

Admission Schedule
For Hanoi & HCMC
Intake
August 2013
Deadline for application
31 July 2013
Deadline for Interview & Test AITEIT
Any time
Intensive English Training
19 March 2013
First class
September 2013

 Tuition and Fees

Tuition and fees can be paid as 3 installments and at the beginning of each semester. Total tuition and fees: VND 284,285,625 (VND7,824,375/credit). Break down of tuition and fees is:

1. Registration fee:                      VND 10,432,500

2. Tuition fee for 1st semester:   VND 93,892,500

3. Tuition fee for 2nd semester:  VND 86,068,125

4. 1st International fieldtrip fee:  VND 15,648,750
(8 days, 7 nights)

5. Tuition fee for 3rd semester:   VND 78,243,750

6. 2nd and 3rd Int. fieltrip fee:      VND 32,340,750 (*)

* Optional for 2nd and 3rd trip. Fee includes: air ticket, transportation, insurance and accommodation.
** R.O.E = 20,865 VND/1 USD. AIT reserves the right to apply the adjust tuition and fees without prior notice.


 Contact:
For morde detailed information please kindly drop at:
www.professionalprojectmanagement.blogspot.com



Asian Institute of Technology in Viet Nam
Ha Noi Office

Asian Institute of Technology in Viet Nam
HCM Office
Mr. Tran Anh Tuan

Ms. Nguyen Le Tuong
Tel: (84-4) 37669493 (131)

Tel: (84-8) 39107423 (117)
Cell: 01 285 687 168

Cell: 01 285 265 168
Email: anhtuan@aitcv.ac.vn