Organisation

Construction is traditionally a contracting business right from the good old days. The industry comprises a very large number of small firms. It is reported that there were three million registered contractors in India in 1987. This number must have been multiplied many times by the turn of century. If we add to the number of labour and unregistered contractors, the figure would be mind boggling. It is rightly said in Indian context that it is much more difficult to hire a trained, skilled and efficient mason than to hire a contractor. 

Most of the work on construction is carried out with mobilization and other advances given by the owner. The capital investment requirement for setting up a construction firm is negligibly small. The requirement of experience for getting registration is almost  non-existent. Thus, almost anybody who has an access to some capital is encouraged to enter on the construction business, without any requirement of skill and or xrofessional Knowledge and experience. Most of these firms have no commitment to construction profession or patience to acquire the required managerial skills. Their motivation to enter into construction business is only to earn fast bucks without any regard for ethics or quality. It is, therefore, not surprising that according to statistics, construction firms are at the top of the list of business failures and bankruptcies. 

A typical large construction project will have a prime contractor or a group of prime contractors, who bid for the work and secure it. Then, this conglomerate of prime contractors, select several subcontractors, for different work packages. A subcontractor in turn, will engage his own group of minor and petty contractors and vendors for various work elements, activities, jobs and trades. Thus, on a typical construction project site, there will be a network of thousands of contracting forms, carrying out contractual activities in a time bound framework. The short term employment with job tenure lasting only for the period of particular contract duration and piece rate payments are main features of construction contracts. Management and labour relations are also contractual in nature and last only for the period of contract duration. 

In general, there are three groups of stakeholders involved in a construction project, each group contributing a specific component, namely the owner group, the engineering group and the construction group. 

1. The owner group supplies the "need" of the project and the finances required to fulfill this need. 
2. The engineering group consists of area experts like architects, structural designers, and construction managers. These area experts supply the specifications, method statements, designs and schedules of the project and perform supervision and quality control functions. 
3. The construction group consists of a matrix of contractors executing the various work packages. 

The interrelationship between these stakeholders is contractual in nature. Thus, there is no supreme authority at construction project site over all the interacting stakeholders. There are only relative power and dependence between different contracting organisations. Construction is therefore a typical example of complex inter-organisational interactions, It involves several participating organisations, both direct and indirect, which influence the overall quality and productivity at site, yet are not responsible or answerable to anyone, Each particular organisation view the project from its own narrow and specific perspective. The owner would emphasis the strict financial control to achieve optimum quality with least expenditure. The priority of construction manager would be the strict adherence to cost, time and quality schedules, architect's main concern will be on aesthetics and beauty while structural designer will stress on safety, simplicity and constructability. The construction contractor will like to push up his output and productivity even compromising with quality and safety at site. Thus, at each interfacing between different stakeholders at construction site is a potential conflict prone area. These complete and conflicting interactions of so many different and independent organisations will have a far reaching and profound influence on the quality, productivity and work environment at a construction project site. 

The existing organisational set up in most of the construction organisations both in public, government and private sectors are not designed to manage such a highly interdependent and conflict prone environment at the construction project. This is quite apparent from the report of Department of Programme Implementation, Project Management Division of Govt. of India (CIDC-1997). It points out that nearly 20% to 50% of projects costing Rs. 200 million or more fail to keep up the stipulated time schedule and cost limits. The average cost overruns of more than 10% of projects are exceeding 100 per cent with some examples where cost overruns are more than 200 to 500 per cent. 

Broadly speaking, the basic activities at a construction project can be grouped into three main categories, i.e. (a) Designing and Planning, (b) Construction Execution, and (c) Inspection and Supervision. Each agency associated with the above sub-group of activities have their own particular organisational set up compatible with the nature of its work load. The detailing will depend upon size, geography of area of interest, nature of activities and complexity of the problems faced by it. 

It, however, can be concluded that the construction industry with all its uncertainties, high risks, and complexities, will always remain the most demanding on construction organisations. It is a challenging as well as hazardous profession. It is an unforgiving enterprise demanding highly creative and innovative human resource with experience, sometimes acquired at a great cost. It is highly unsatisfying to note that it is regarded with suspicion by both the government departments and public at large, who fail to appreciate the large degree of uncertainties involved in the highly risky and competitive environment.