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CHANGE MANAGEMENT IN THE PROJECT INSTITUTE OF CIVIL BUILDING

Автор Доклада: 
Kurmangalieva A.
Награда: 
CHANGE MANAGEMENT IN THE PROJECT INSTITUTE OF CIVIL BUILDING

УДК: 331.725:658.5

CHANGE MANAGEMENT IN THE PROJECT INSTITUTE OF CIVIL BUILDING
 («RESCUE OF THE SINKING SHIP»)

Aida Kurmangalieva, Ph.D, the senior lecturer
Astrakhan State University

The Article is devoted to studying a management system in the Project Institute in detail, the analysis of driving and restraining forces for the development of the company and the use of other methods from Change Management to prepare recommendations to make the company profitable and successful.
Keywords: change strategy, matrix structure, project team, the staff, profitable

The Project Institute is a joint stock company, which has its own six-storey building, car park, dining room and necessary material equipment. Over 60% of employees are united in trade unions, whose interests are represented by a chairman in the board of directors and administration of the Institute.
Since its inception in project organization adopted a linear-functional management structure. Inside large architectural and infrastructure divisions during the establishment of the project there is a designed structure of teams, which brings some inconsistency in the overall management.

The main distinguishing feature of linear-functional structure is a dual reporting line-staff and functional managers. Specialization of the administration is based on functional grounds. Units intertwined with each other on the principle of mine. The advantages of this structure are a combination of linear and functional relationships, steady consolidation of authority and responsibility for staff. The benefit of the project structure is effort’s concentration on implementing the core area of activity.

The disadvantage of the linear structure is duplication of functions of managers and specialists in the management process, thus is an inadequate response to any external and internal changes in the situation: economic, legal, personnel and technology.

The Board of Directors approves the candidacy of General Manager, Chief Engineer, Chief Architect and Deputy Director for General Affairs. They report to the chiefs of production, information technology departments, planning and economic sector. Advisers of the Institute, a secretary, an inspector of stuffing services and accounts are united in the department administration.

Within each production department the chief engineer projects and the manager, responsible for creation sphere, production and protection of projects in harmonizing organs and expertise, are responsible for overseeing the construction of projected objects, and also bear personal legal liability for the safety of the design decisions taken during facility operation.

The main customers are the Client and the Project Investors. The project begins upon the receipt of a written letter from the Investor or after winning the tender. Customer develops a project briefly approved by the city administration, the regional center and the landowner. Typically, this task has been repeatedly adjusted during the operation at will or financial capacity of the Investor.

Each project team including the chief architect and chief engineer of the functional units is responsible for individual sections of the project in terms of building designs, layout area, the organization of construction, engineering, environmental protection, at an estimated project cost. Each of them is responsible for the quality of the documentation developed within the project team (the Institute) and the Customer only during the examination and approval of the project. In each of the production department as Chief Engineer is the highest in rank after the Chief. All design decisions are coordinated and approved by the chief engineer and chief architect of the institute.

The main performers and creators of the project are engineers, architects, leading and senior staff, heads of groups, sectors, reporting to chief engineers, architects, project and department heads at the same time. Since the staff of the functional departments work in separate rooms and computer rooms, the institute is provided with internal telephones, internet and local network, where the communication by small-scale production is carried out. Meetings of the Professional Project Groups are held in rooms where the chief engineer of projects, as well as in the offices of the chief engineer and general director of the Institute.

In the absence of Manager of Human Resources his functions are distributed among the department heads, team leaders, sector inspector for human resources and chairman of trade union organization [1, 2]. The main burden is the head of the department, who participates in the recruitment, training, career development, motivation and the creation of safe environmental conditions. The list of its direct duties include the implementation of quality systems in the process of creating the project and a weekly report on the volume of work performed before the leadership of the institute, the distribution of bonus fund. For information and technical equipment and maintenance stuff production departments are responsible for chiefs of relevant departments of the Institute.

Powers of mentoring, training and adaptation experts create a good morale delegated to the heads of groups and sectors of the functional departments. As the joint activities of the team unity staff celebrated national holidays, birthdays, committed a trip to the Volga River for a picnic. Institute of Management and unions help employees in difficult moments of their lives when they lose loved ones, in case of illness, provide material assistance, and organize children's holidays.

Traditional values in a team are: respect for elderly people, respect for cultural production and interpersonal communication, the transfer of professional experience in learning, enhancing of professional outlook, and innovative initiatives in the work, mutual help and mutual assistance in times of trouble.
The main components of motivation is the system of general and specific target bonuses for work performed, training in various courses with the skills, support of their participation in various seminars, conferences and competitions for higher education, vocational reorientation. Institute is considered to be "smithy" occupational personnel for the construction industry. It should be noted that there is the traditional loyalty of management to reconcile the functional responsibilities of valuable expertise to the work of other organizations and even the leadership of their own firms.

In view of the crisis came in 2009 in the construction industry operating linearly and functional structure of personnel management was poorly adapted to economic difficulties. Naturally a number of values were lost, began to disappear professional ethics, appeared apathy and indifference to the work, expectations, experts increasingly stopped defending themselves, which led to massive migration of young qualified staff especially in their own company and competition between design organizations. The administrative board of the Institute and its units in the main pension age remained the same. So the main problem of the Institute is the outdated views of its leaders on management. The linearly and functional structure was not effective in the project company in which there was a great need in quick reaction during setting up the relationships and communications with customers and investors. The organization structure needs to be changed.

The analysis shows that the most suitable type of structure for this company is matrix. This type of structure supposes creation project teams for working on every order separately. The managers of project teams are subordinated just to Top –managers. This lets solve faster the problems which appear during the performance of projects [3].

For the main driving forces for change in this institute we can consider good material and technical and information bases, an excellent professional staff, the ability of daily training, mentoring system, self-actualization, support initiatives, and the warm and friendly climate of respect and trust between members of the staff.

The restraining forces include the lack of a clear program for implementing the changes, resistance from the staff (especially from board of directors, outdated and non-transparent system of motivation, lack of awareness among employees by managers, authoritarian style of management in making decisions, weaknesses system of intellectual property protection. The Top-managers have outdated mindset, lost courage, initiative, strategic vision, the desire to own changes [7].

To be successful, it is necessary for every employee to work hard every day. The situation requires that responsibilities of the managers will be constantly changed and work processes will be complicated and upgraded. At present the most innovative and bold decisions virtually are made on top. But innovation can not be implemented through heartless managers not supporting the change because they do not see any benefits for themselves. It’s necessary to involve young leaders into the process of preparing and implementing the changes because they are easily trained to bring people into the process of change and get them interested in the results.

The analysis of the present situation in project institute and employees’ attitudes toward to various changes shows us some key areas which need to be changed. They are: relationships with Customers of projects, the structure of the company, the approaches to personnel administration and organizational behavior management, the system of motivation and maintenance of protection of intellectual property.

Relationships with Customers and investors of projects. The Relationships with clients and investors of projects should be built strictly in accordance with Russian legislation. The institute should define the problems with them, divide their privileges, and organize the legal control of performance of the contract terms such as duration, quality and payment. Prices policy should be flexible on the base of a real course. Quality of the design documentation should be at the highest level.

Organization structure. We suppose that the most comprehensible type of the management system in the organization will be matrix. The matrix structure is built due to the principal of the performers’ subjection. Administrative impact is performed linearly, functionally and objectively

The choice of matrix type of stricter was made because of the reason of peculiar properties of the Project institute activity. The matrix structure will be based not on the departments, but on large design teams which will directly report to chief engineers of projects. The general director of institute should be helped by three Top - managers: manager of project performance, financial manager, and manager of human resources.

The advantages of the management matrix system lie in the increase of the performers’ responsibility, strengthening control functions of managers, response time on external and internal situation changes. The disadvantage is the complexity of organizational attitude, multithreading of informative interrelations and multilevel subversion of performers.

The management of the Staff Is the most vulnerable in activity of institute and demands to be cardinal changed. It is necessary to update the administrative board of the Institute, to dilute it with young and creative people, to train them the new methods of management [2, 4].

It is better to bring one’s own young employees to the administrative board. TOP - managers, chief engineers of projects should be trained at short courses of management. They should be engaged on a contract basis. They should bring into the institute the spirit of teamwork and a healthy competition between design groups. Top manager of planning and financial operations should be invited from outside.

Chief project engineer and top - HR Manager should be assigned to form project teams. Responsibility for implementing the decisions and control the design process is regulated by the quality system ISO 9000 and 14000.

The managers will expect the increase of the flows of investments and getting new useful experience. The legal relationship between employer and individual employees are best governed by contracts. The relationships with the labor union should be regulated with a collective agreement. The staff should participate in making decisions connected with material and information support, jobs conditions. The staff also should follow regulations of safety strictly. Any useful initiative should be welcomed at all levels of government.

Organizational behavior and corporate rules. The traditions and spiritual cultural values which have been developed in the project institute should be supported. People should be assured that the Institute needs them, and will give those help and support to get the success. It is necessary to supervise and stop the facts of offensive and incorrect behavior. It is necessary to develop effective system of protection of the general intellectual property and access rules to it. Corporate rules which regulate culture of professional and ethic behavior should be prepared and issued in special paper. Any breach of rules should be punished [5].

The motivation system is the best way to encourage the employees for good performance. It should be well regulated and transparent [3, 6]. Designers should represent how much financial resources they will be provided with.

Chief engineers should be delegated the right to give monetary benefits to employees. The staff should be informed about all financial operations which have been done with company finance.

The Institute can give other benefits in the form of supporting employees’ participation in different large and interesting exhibitions, conferences or rewarding them with a diploma or a letter, growth in career. All kinds of self-education, training in postgraduate study, protection of dissertations, second higher education should be encouraged.

Every specialist and manager of Project Institute should do in well-defined segment of the anti-crisis decisions guided by corporate values and traditions. Among the anti-crisis decisions in the change management, I would like to propose the following.

  • 1. Changing of relationships with Customers in accordance with Russian legislation.
  • 2. Radical changing the structure of personnel management from the functional linear into matrix.
  • 3. Engaging employees on the contract form.
  • 4. Updating the administrative board of the Institute, teaching them new methods of management
  • 5. Creating typical projects which easily could be modified into creative projects for particular clients.
  • 6. Issuing of corporate rules.
  • 7. Changing the system of motivation.
  • 8. Introducing the system of intellectual property protection.

The main decisions in the management of Human resources and timeline:

  • General Manager (Change leader)
  • Five Chief Engineers (from PD)
  • One senior administrator (from APD)
  • Head of trade union
  • TOP- manager economist (invited)
  • 6-8 month for change

The change of the management of the company to the high level has become a necessity for any society and economy now. The project companies have the specific feature: they produce intellectual products for which they are responsible before the customers. The large project institute owning a good assets and staff couldn’t bear the task of the economic shocks in construction industry because of bad management. The time has shown that the old ways could no longer work. The Institute needs a business manager, a strategist, a professional and a leader – not a follower – of change. It needs to change from being largely reactive, responding to external “pulls” and become much bolder, more entrepreneurial and proactive, and creating more “pushes” for innovation.

References:

Books:

  • 1. Dessler G. The personnel management [translated from English] – M.: Binom, 2004. – 799 p.
  • 2. Kibanov A. Y. The basis of personnel management. – M.: INFRA-M, 2007. – 447 p.
  • 3. Armstrong M. The practice of human resources management [translated from English] – 8th edition. – Saint-Petersburg.: Piter, 2005. – 832 p.
  • 4. Anderson D. and Ms. Anderson L. A. Beyond Change Management: Advanced Strategies for Today’s Transformational Leaders. 2001.
  • 5. Debora L. Nelson, J. Campbell Quick. Understanding organizational behavior. - Thomson SW, 2008. – 464 p.
  • Electronic Sources:
  • 6. Susan Heathfield, Change Management Wisdom http://humanresources.about.com/library/weekly/aa030701a.htm
  • 7. Kurt Lewin’s Theory of Force Field Analysis from Accel-Team Techniques
  • http://www.accel-team.com/techniques/force_field_analysis.html  
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