Introduction To Fashion Design Objectives Cultural Studies Essay

Introduction To Fashion Design Objectives Cultural Studies Essay Meaning of fashion Fashion is what is accepted and adopted by the society at any given point of time. In other words it is a lifestyle statement of an individual or a group of people. In this sense it covers a wide range of human activities. Style, way, manner, mode, method and approach are the common terms associated with fashion. Fashion is an ongoing process and ever changing phenomenon that leads the world and is there in every nook and corner of the world. As fashion is a dynamic process, there are a number of external factors that contribute to it. There are various factors whose interplay affects the fashion scenario; it can be factors like social factors, political factors etc. The fashion scenario is a reflection of the prevailing conditions or tastes of people in the society. Everything that one uses, buys, wears, acquires has to be innovative and thoughtful. Fashion varies from society to society and from region to region. It is a term which is primarily associated with the art of clothing and accessories. In its real sense it is a continuous process of changes in styles in any field, be it clothes, shoes, bags, profession, furniture, furnishings etc. The term fashion used in this book is in a narrow sense: fashion here means the style or styles of clothing and accessories worn at a particular time by a particular group of people. Fashion life cycle Fashion is an ongoing cycle in which new trends take place, are accepted and get finally outdated and rejected. This brings about a change and gives way to newer trends. This process of acceptance to rejection forms a curve. However, the life of all trends is not the same. For some trends the cycle may be completed in 6 months whereas for others it may even be a few years. This curve represents the pattern of life of a trend that takes place in five phases (Figure 1). Phase 1: Introduction This is a stage where a particular style is just introduced and not many people follow it. It is created by stylists or designers, who are involved in developing new designs. Changing or manipulating the design details, colour or pattern etc. can bring about these changes. At this stage the cost of the garment is generally very high because the garment is not produced in bulk and thus the cost of production goes up. These garments are generally showcased in fashion shows, fashion exhibitions and get extensive media coverage. The most popular method of showcasing, nowadays, is by sponsoring the soaps that are telecast on television and through the film industry. These are methods of marketing so that the orders placed from these activities can go in for bulk production. This would bring down its cost. Phase 2: Rise Once a particular style is introduced, its popularity then depends upon the response of the people to that style. If the indications drawn are positive, then the other manufacturers start adapting and copying the same style. At times the designers too have an alternate brand, clothes line that is at a lower price. This is done so as to increase the transaction and to take the orders in bulk. To increase the popularity of particular style one may modify or alter it a little bit to suit the category of people he/she is catering to. Phase 3: Popularity Peak This is a stage where the demand for a style is the maximum or is at its peak. The production happens at all levels but it is produced ct different levels at different prices. The manufacturers keep a close watch on the reactions/response of the customers to a particular style so much so that even a slight indication towards acceptance jumps them to take production in quantities. This thereby reduces the manufacturing cost per garment and leads to mass acceptance. Such situations, many times, lead to fakes or Knockoffs. Knockoffs are cheap adaptations of design, which get a good response. They are priced low because of more economic versions of fabrics, trimmings and finishing techniques that are used. This is done by picking up a sample from a particular garment and making a pattern for the same, but one must be careful in getting into mass production as not every style is meant for masses. The practice of Fakes and Knockoffs works to a disadvantage for the original designer or styl ist. However one can avoid this situation by getting a copyright for a particular design, but keeping in mind the dynamic fashion era, taking a copyright for a particular design is not useful. Firstly, fashion vis-a-vis contemporary fashion trends change very fast and secondly, the procedure of taking a copyright is elaborate and tedious. Therefore, by the time one actually gets the copyright, the design might get outdated. Hence the alternate is developed for the situation whereby the designer themselves get involved in an alternate line of clothes where the cost of production is much lower than the original. Many a times the manufacturers get involved in the malpractice of imitating the original designer by using a similar firm name or label and manufacturing fakes. This illegal practice is carried out on international level. Goods are confiscated as and when the raids are conducted but this however has not been able to stop the malpractice. Phase 4: Decline After attaining the saturation point of popularity, the design slowly starts being rejected thereby bringing a downfall in its demand. This happens when people get tired of a particular style and start looking for a change that is innovative and fresh. In this stage the consumer continues to wear the garment but does not eagerly goes into buying it. Thus comes the phenomenon of sales, to remove the left-over stock of designs that has been discarded, before it gets too late and they become outdated. Phase 5: Obsolescence This is stage where a consumer completely discards a particular design because the consumers are tired of seeing and wearing the same style which gives way to newer designs, styles to emerge. These stages of fashion cycle may vary in time duration. A particular style may be accepted fast and may get rejected even faster, whereas the other might/may survive for a longer duration. Based on the duration, fashion is divided into classics and fads. There are times when a particular design may continue to survive but in the meantime it may undergo various changes in its design elements. For instance, the silhouette might change or the fabric used might be a different one. This explains the existence of a cycle within a cycle; for example, bell bottom or straight cut in jeans cycle, where just the silhouette has changed. This marks the existence of a cycle within a cycle. There are exceptions to a fashion cycle, which causes a change of trend in the flow of the fashion cycle. Such situation arises when we have an interrupted fashion cycle, due to varied reasons like manufacturer might stop the production due to decline in popularity of a particular style, and might be the manufacturer wants to start the production for some other pattern of garment. Some of the other reasons for such interruptions are: social factors, political, economic and other factors. One good example of such a situation is the radical change brought about in the dressing of people before World War II and after that. People shifted from elaborate flared clothes to straight and more fitted attires / dresses. There are certain cycles that are recurring cycles. In other words, the style is there for some time, follows the normal fashion cycle and then becomes obsolete but only to be revived again. In this case when it reappears, the silhouette proportions might remain same whereas the design details and fabric might change to cater to the prevalent demands or for enhancing the look of the garment. To understand this cycle, in Indian context, one can take the example of short tight Kurtis of 1960s, which have been revived again. Fashion terminology What is the difference between fashion, style, and design? Just what do high fashion, mass fashion, taste, classic, and fad mean? To avoid confusion when discussing fashion, we must first understand the meanings of these terms. Style The first step in understanding fashion is to distinguish between fashion and style, words that most people use interchangeably although there is an immense difference in their meanings. In general terms, a style is a characteristic or distinctive artistic expression or presentation. Styles exist in architecture, sculpture, painting, politics, and music, as well as in popular heroes, games, hobbies, pets, flirtations, and weddings. In apparel, style is the characteristic or distinctive appearance of a garment-the combination of features that makes it unique and different from other garments. For example, T-shirts are as different from camp shirts as they are from peasant blouses. Riding jackets are as different from safari jackets as they are from blazer jackets. Although styles come and go in terms of acceptance, a specific style always remains a style, whether it is currently in fashion or not. Some people adopt a style that becomes indelibly associated with them and wear it regardless of whether it is currently fashionable. Trend A trend is a general direction or movement. For example, you will often read in fashion magazines there is; a trend toward longer skirts; it means that several designers, including some leading ones, are showing longer skirts, leading retailers are buying them, and fashion-forward customers are wearing them. Marketers always want to know whether a new development is going to be a trend or a fad because they want to cash in on trends but avoid getting burned by fads. A trend can originate anywhere, and has a solid foundation that supports its growth; a fad does not. Fashion Fashion is a style that is accepted and used by the majority of a group at any one time, no matter how small that group. A fashion is always based on some particular style. But not every style is a fashion. A fashion is a fact of social psychology. A style is usually a creation from an artist or a designer. A fashion is a result or social emulation and acceptance. A style may be old or new, beautiful or ugly, good or bad. A style is still a style even if it never receives the slightest acceptance or even approval. A style does not become a fashion until it gains some popular acceptance. And it remains a fashion only as long as it is accepted. Miniskirts, moustaches, and theatrical daytime makeup have all been fashions. And no doubt each will again be accepted by a majority of a group of people with similar interests or characteristics for example, college students, young career men and women, retired men and women. Classic Some styles or designs continue to be considered in good taste over a long period of time. They are exceptions to the usual movement of styles through the fashion life cycle. A classic is a style or design that satisfies a basic need and remains in general fashion acceptance for an extended period of time. A classic is characterized by simplicity of design which keeps it from being easily dated. Sari and Lehenga are outstanding examples of a classic. Other examples include denim jeans, blazer jackets, turtle neck sweaters, etc. Fad A fashion that suddenly sweeps into popularity, affecting a limited part of the total population, and then quickly disappears is called a fad. The fad starts by being quickly accepted and then quickly imitated by others. Fads often begin in lower-price ranges, are relatively easy to copy, and therefore flood the market in a very short time. Because of this kind of market saturation, the public tires of fads quickly and they end abruptly. Fads follow the same cycle as fashions do, but their rise in popularity is much faster, their acceptance much shorter, and their decline much more rapid than that of a true fashion. Because most fads come and go in a single season, they have been called miniature fashions. Fashion consumers Fashion leaders Fashion leaders are the people who are innovative and bold enough to start a new fashion or try something away from what is prevalent in the market. They have the courage to adopt new fashion not necessarily to attract attention but to look different. People of social, political, and economic importance here and abroad are seen as leaders in the downward movement theory. The horizontal flow theory recognizes individuals whose personal prestige makes them leaders within their own circles, whether or not they are known elsewhere. Finally, the important fashion role played by young, lower-income groups in the last half of the 20th cen ­tury is recognized in the upward flow theory. The theories of fashion adoption stress that the fashion leader is not the creator of the fash ­ion; nor does merely wearing the fashion make a person a fashion leader. As Quentin Bell ex ­plained, the leader of fashion does not come into existence until the fashion is itself created. A king or person of great eminence may indeed lead the fashion, but he leads only in the general direction which it has already adopted. If a fashion parade is forming, fashion leaders may head it and even quicken its pace. They cannot, however, bring about a procession; nor can they reverse a procession. Famous people are not necessarily fashion lead ­ers, even if they do influence an individual style. Their influence usually is limited to only one striking, style, one physical attribute, or one time. The true fashion leader is a person who is seeking constantly for new fashion, therefore likely to launch a succession of fashions rather than just one. What makes a person a fashion leader? A person eager for the new is merely an innovator or early buyer. To be a leader, one must be influential and sought after for advice within ones coterie. A fashion influential sets the appropriate dress for a specific occasion in a particular circle. Within that circle an innovator presents current offerings and is the earliest visual communicator of a new style. Such people can be split into two categories depending upon the role they play. Innovators People who are the creator of new fashion styles come under this category. They may be renowned designers or a simple person who likes to experiment with his / her clothes. Such people believe in wearing clothes that are unique, in terms of colours, trimmings, accessories, designs, the style of draping a garment etc. They might consciously or unconsciously give an impetus to a particular style that might get popular. Influential or motivators This group of consumers consists of those individuals who are socially eminent and are an idol for other people, thereby motivating them to adopt a particular style of clothing. They can be movie stars, people who are the whos who of society, politicians, social activists, etc. Their sense of dressing inspires people to follow them. Such peoples style is cashed upon by the manufacturers who start manufacturing in bulk. It can be anything ranging from jewellery, hairstyles, accessories etc. One can rightly give the example of Princess Diana whose style of dressing was an example for quite a few. As monarchies were replaced with democracies, members of the wealthy and international sets came into the fashion spotlight. Whether these rich and wealthy members of society derive their position from vast fortunes and old family names or from recent wealth, they bring glamour that draws attention to everything they do. Today, through the con ­stant eye of television, magazines, and newspa ­pers, the average person is able to find fashion leadership in a whole new stratum of society the jet set. What these glamorous people are doing and what they are wearing are instantly served up to the general public by the media. As far as fashion is concerned, these people are not just in the news; they are the news. Any move they make is im ­portant enough to be immediately publicized. What they wear is of vital interest to the general public. The media tell us what the social leaders wear to dine in a chic restaurant, to attend a charity ball, or to go shopping. Because they are trendsetters, their choices are of prime interest to designers and to the world at large. Of course, this inundation of news about what social leaders wear influences the public. The average person is affected because so many manufacturers and retailers of fashion take their cue from these social leaders. Right or wrong, fashion merchants count on the fashion sense of these leaders. They know that the over ­whelming exposure of these leaders in the media encourages people of ordinary means to rotate them consciously or unconsciously. Fashion today takes its impetus and influence from people in every possible walk of life. These people have one thing in common, how ­ever: they are famous. Because of some special talent, charisma, notoriety, or popularity, they are constantly mentioned and shown on televi ­sion, in fashion magazines, and in newspapers. They may or may not appear in the society pages. In this group can be found presidents and princesses, movie stars and religious leaders, sports figures and recording stars, politicians and TV personalities. Because they are seen so frequently, the public has a good sense of their fashions and lifestyles and can imitate them to the extent of the pub ­lics means and desires. Prominent individuals have been responsible for certain fashions that continue to be associated with them. Fashion followers There are many people who are followers, and good ones. Individuals, who do not like to experiment with new styles, come under the category of fashion followers. They are people who first let the style be tried by people and accepted by society, before going into adapting it. There might be people who like trying but due to lack of resources they are not able to do so. It can be monetary terms or in terms of time. There are even people who do not give a lot of importance to their style of dressing. As for them, clothing is just a basic necessity and therefore wasting time on it is not worthwhile for them. One of the reasons for a person to become a fashion follower is the fear of being singled out as a different sheep in the herd. They like to be just one of the groups. In fact, fashion followers category of people is the most important category as this is the group on which bulk of the work of the fashion industry works. It is for such people that manufacturers get into mass production. Most of the manufacturers cater to this category of people and manufacture whatever style goes along with them. Fol ­lowers are in the majority within any group. Without followers the fashion industry would certainly collapse. Mass production and mass distribution can be possible and profitable only when large number of consumers accepts the product. The styles fashion leaders adopt may help manufacturers and retailers in determining what will be demanded by the majority of con ­sumers in the near future. Only accurate predic ­tions can ensure the continued success of the giant ready to-wear business in this country, which depends for its success on mass produc ­tion and distribution. While fashion leaders may stimulate and excite the fashion industry, fashion followers are the industrys lifeblood. One important section of fashion followers is the people who form the Fashion Victim category. Some followers of fashion become slaves of it and start following the fashion phenomena without considering whether the particular garment suits them or not, as not every outfit or style suit everyone. One has to keep many things under consideration before adorning a garment. For example, physical characteristics of an individual, occasion, climate etc., are few of the important factors that affect the style of clothing. Thus people who blindly follow the fashion trend without considering the fact that it suits them or not, come under the category of fashion victims. Fashion movement Fashion is, in many ways, like a river. A river is always in motion, continuously flowing- sometimes it is slow and gentle, at other times rushing and turbulent. It is exciting, and never the same. It affects those who ride its currents and those who rest on its shores. Its movements depend on the environment. All of this is true of fashion, too. The con ­stant movements of fashion depend on an envi ­ronment made up of social, political, and economic factors. These movements, no matter how obvious or how slight, have both meaning and definite direction. There is a special excite ­ment to interpreting these movements and esti ­mating their speed and direction. Everyone involved in fashion, from the designer to the consumer, is caught up in the movement of fashion. The excitement starts with the textile pro ­ducers. Fully 12 to 18 months before they offer their lines to manufacturers, the textile people must choose their designs, textures, and colors. From three to nine months before showing a line to buyers, the apparel manufacturers begin deciding which styles they will produce and in which fabrics. Then, two to six months before the fashions will appear on the selling floor, the retail buyers make their selections from the manufacturers lines. Finally, the excitement passes on to the consumers, as they select the garments that will be versatile, appropriate, and suitably priced for their individual needs and wants. Successful de ­signers, manufacturers, buyers, and consumers have a good understanding of basic cycles, prin ­ciples, and patterns that operate in the world of fashion. Their predictions are based on this un ­derstanding. Fashion adoption theory According to this theory, there is a category of people who are socially eminent or elite. They might be politician, celebrities, sports player, etc. This category becomes the trendsetters for the other people who start following them. Gradually manufacturers from each category start moulding the fabric and finishing of the garment to fit the pockets of the strata of people they are catering to. This is done till the time the consumer does not lose interest in that particular style. The Trickle-down theory states that the movement of fashion starts at the top with consumers of higher socioeconomic status and moves down to the general public. This is the oldest and most accepted theory of fashion movement. According to this theory, people with lower incomes will only wear fashions that have become popular among consumers with higher incomes at the top of the ladder. As more people begin to wear the fashions, those at the top become less interested and begin looking for something new. Veblen (1899) was one fashion observer at the turn of the 20th century. He put forth Trickle-down theory. Looking around at his or her own time, the observer notices that fashion is still restricted to those at the top of the class structure-the rich and socially prominent. Fashion moves downward from the elite class to the lower classes in stately and slow progression, but never reached all the levels. The lower classes did not have the income, access, or the freedom to follow fashions dictates. He described the upper strata of the social system as the leisure class. Members of the leisure class displayed wealth in two distinctive ways, through conspicuous leisure and conspicuous consumption. They adopt an extravagant lifestyle of travel, entertainment, the pursuit of pleasure, Art collection, and acquisition of luxurious homes and furnishings demonstrate conspicuous consumption demonstrating conspicuous leisure. Highly visible upper class made up of those occu ­pying power positi ons in business, politics, and media. Simmel (1904), a sociologist, identified the engine of fashion change in the opposing human tendencies toward conformity and individuality. Conformity means striv ­ings for social adaptation. The imitator class believes in social similarity, in acting like others. Individuality suggests the need for differentiation. The elite class differentiated itself through fashion, and the adjacent lower classes reproduced the look. The individual seeking differ ­entiation constantly experiments with the new, relying in large part on personal convictions. These dual drives can also be played out in social groups where fashion simultaneously functions as a means of class distinction and as a button / symbol of group uniformity. Mass dissemination theory Due to globalization and better international network, there is mass dissemination of fashion. For example: A show that is conducted in Paris might get appreciated in India and manufacturers start the variants of the same style such that it suits the category they are catering to. With the media playing an important role in everybodys life, the trickle across theory is gaining much more relevance in todays scenario. This theory hypothesizes that designs are produced at all price levels at the same time. The merchandise quality and lines may vary, but new fashion exists for all groups. Within a given fashion season consumers in all socioeconomic groups simultaneously have the freedom to select from a range of styles and this range is sufficient to satisfy personal taste. Imitation and differentiation were still part of the dynamic because others would imitate innovators and influential within their social strata and those fashion leaders would move to new looks. Rather than elite introducing fashion ideas into society, King saw leadership within each social stratum and within each social group. Fashion acceptance begins among several socioeconomic groups and the leaders within each group influence its members. This theory is especially probably in the 21st century because technology allows designer fashions to be copies quickly and easily, making them available to all consumers sooner. Bottom up theory This theory states that the movement of fashion starts with consumers on lower-income levels, then moves to consumers with higher incomes. For example, the denim fabric was first used for work clothing for labors and was later adopted by hippies and other lower socioeconomic groups. From there, the designers adopted denim as a fabric and designed clothing for the higher socioeconomic consumers. Thus it is not necessary that new style statements emerge only from the economically socially eminent people. Fashion dresses Fashions appeal to many different groups and can be categorized according to the group to which they appeal. High fashion High fashion refers to a new style accepted by a limited number of fash ­ion leaders who want to be the first to adopt changes and innovation in fashion. High-fash ­ion styles are generally introduced and sold in small quantities and at relatively high prices. These styles may be limited because they are too sophisticated or extreme to appeal to the needs of the general public, or they are priced well beyond the reach of most people. However, if the style can appeal to a broader audience, it is generally copied, mass-produced, and sold at lower prices. The fashion leaders or innovators who first accepted it then move on to something new. Haute Couture Haute Couture is a French word for very rich quality / fine costume or dress design. Its made to measure tailoring, in simple words it is made to the measurement of a particular customer. It even means the art of dress-making. These clothes are expensive and are worn by celebrities. They have a limited number of clients. From couture originated the word couturier which means a male designer having his own couture house and couturiere means a woman having her own couture house. Haute Couture again a French word means high fashion garments that have finest of fabric and workmanship. Ready to wear Ready to wear fashion is also known as Mass or Volume fashion. These are garments, which are produced in large numbers thereby reducing the cost of production and thereby making the garments less expensive. They are standard sized which makes them more suitable for larger productions. Ready to wear collections can also be divided into Designers collections and street fashion. Designer collection These have a high quality, a superb finish and a unique cut and design. These collections are the most trendsetting compared to Haut Couture and Designer ready to wear collections contain often Concept items which represent a certain philosophy or theory. Generally introduced and sold in small quantities and at relatively high prices. These items are not so much created for mass sales but just to make a statement. The designers ready to wear collection is also presented on the international catwalks. Street fashion To contrast with high fashion, mass fashion consists of styles that are widely accepted. These fashions are widely produced and sold in large quantities at moderate to low prices and appeal to the greatest majority of fashion conscious consumers. Mass fashion accounts tor the majority of sale in the fashion business. Mass fashion is the bread and butter of the fashion banquet! Meaning of design The word Design is used both as a noun and a verb. As a verb, to design refers to the process of originating and developing plan for a product, structure, system, or component within intention. As a noun, a design is used for either the final plan (e.g. proposal, drawing, model, description) or the result of implementing that plan in the form of the final product of a design process. Design is a Visual Language. A language is the medium of communication. Communication is nothing but the transfer of information from sender to receiver with the information being understood by the receiver followed by a feed back to the sender. Visual language is self explanatory, in which the information is passed to the people with the help of signs, sketches, images, photographs and videos. Design is the process of selecting and organizing different elements in order to fulfil a specific target in terms of design. Elements are the basic components or building blocks of a design. A process is a series of actions taken towards achieving a particular goal. Selection process is aimed at carefully choosing things as being the most suitable. Organizing activity aims at arranging all the items or elements in an orderly way. Design is often viewed as a more rigorous form of design, or design with a clearly defined purpose. In Figure 1.2 (a) different components like a big circle, two small circles, a vertical line and an arc are selected. But they do not convey any particular message, because all of these components maintain their separate identity. In Figure 1.2 (b) all these components are organized in such a way that all of them dissolve their own identity in order to constitute a human face. The big circle represents the outline of a face, small circles assume eyes, the vertical line constitutes a nose and the arc represents mouth. In order to learn any language, one should be acquainted well with alphabets and grammar of that language. Elements of design are alphabets of design language whereas principles of design are grammatical syntax of it. Aspects of design Every garment makes a statement. It communicates with you. It has its own identity. It may give illusion to you such as Shy or Outgoing Dashing or cautious Cool or Dull Sophisticated or primitive When you go to the market to purchase a garment,

Proctor & Gamble Essay -- Business Management Analysis Essays

Proctor & Gamble   Ã‚  Ã‚  Ã‚  Ã‚  Founded in 1837, Procter & Gamble is the #1 U.S. makers of household products and a recognized leader in the development, manufacturing, and marketing of a broad range of products including Crest toothpaste, Tide laundry detergent, Ivory soap, Pampers diapers, and Dawn liquid detergent. Procter & Gamble has operations in over 70 countries and employs over 100,000 people worldwide and markets to nearly five billion customers in over 140 countries.   Ã‚  Ã‚  Ã‚  Ã‚  Procter & Gamble?s purpose or mission statement states exactly why Procter & Gamble is so driven in providing quality products and services to consumers all over the world. Procter & Gamble?s purpose is as follows: ?We will provide branded products and services of superior quality and value that improve the lives of the world?s consumers. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper www.pg.com/jobs/company_culture/purpose.jhtml.? Procter & Gamble?s company culture, think globally, act globally, focuses on a variety of core values: leadership, ownership, integrity, passion for winning, and trust. Procter & Gamble works well with the national cultures of Italy and Japan because Procter & Gamble thrives on diversity. Everyone at Procter & Gamble is united through Procter & Gamble?s values and goals. Procter & Gamble is such a giant in the household industry. The company sees diversity as advantage. Procter & Gamble?s diversity covers a broad range of characteristics, such as race, sex, personal, religion, cultural heritage, etc. Within the company, Procter & Gamble creates an advantage from their differences. Outside Procter & Gamble, the company is very sensitive to other national cultures because of their unique culture found within. Every company has its own unique culture. Most organizations don?t deliberately try and create a culture. The culture of an organization is created unconsciously, based on the values of top management. Procter & Gamble?s principles are derived from the company?s Purpose and Values. The core principles of the company are: ?  Ã‚  Ã‚  Ã‚  Ã‚  We Show Respect for All Individuals ?  Ã‚  Ã‚  Ã‚  Ã‚  The Interests of the Company and the Individual are Inseparable ?  Ã‚  Ã‚  Ã‚  Ã‚  We are Strategically Focused in Our Work ?  Ã‚  Ã‚  Ã‚  Ã‚  Innovation is th... ...octer & Gamble needs to institute changes that will help them become faster. A better public corporate image of Procter & Gamble could also raise awareness that Procter & Gamble is home to many household products, even those environmentally safe. The recent Dawn commercial is a great example. Dawn is used to clean off oil spill animal victims. The general public is not aware of many of the products Procter & Gamble market and produce. Better advertising would be beneficial. Procter & Gamble uses their diversity successfully as a global company. The people that work for them are their greatest asset. Procter & Gamble believes tat it is important to develop and support a diverse workplace. Now the company needs to broaden its corporate culture outside of the United States more than it has in the past for continues future success. References 1). www.cyborlink.com/besite/hofstede.htm 2). www.geert-hofstede.com/hofstede_italy.shtml 3). www.geert-hofstede.com/hofstede_japan.shtml 4) www.geert-hofestede.com/hofstede_united_states.shtml 5). www.pg.com/jobs/company_culture/core-values.jhtml 6). www.pg.com/jobs/company_culture/purpose.jhtml 7). www.uvt.nl/web/iric/hofstede.htm

The Lottery vs State of Grace Essay -- essays research papers

Shirley Jackson's "The Lottery" talks about a community that follows a tradition. Every year the people take everyone's name, put it in a black box, and pick the name of a person. This person they stone to death. Their reason range from an idea that having the lottery makes them civilized to an idea that the lottery makes for good crops. The author suggests that the real reason is society’s need for a victim. When talking about communities that have given up the tradition of choosing one person to stone to death, "Old Man Warner snorted, 'Pack of crazy fools' he said. 'Listening to the young folks, nothing's good enough for them. Next thing you know, they'll be wanting to go back to living in caves, nobody work any more, live that way for a while. Used to be a saying about "Lottery in June, corn be heavy soon."'" (Jackson, The Granta... Page 66) This tradition causes the people of the town to destroy each other instead of working together to destroy the tradition. As Tessie Hutchinson is getting stoned, someone from her community puts a stone in her son's hand. Even the closest family member participates in the horror. "The children had stones already, and someone gave little Davey Hutchinson a few pebbles." (Jackson, The Granta... page 62-63) This action shows how tradition is being passed on literally from hand to hand. This stoning is the way that the people of the community act out their fear of being ...

Communication Management Challenges in Construction Project Execution

Go Up to Table of Contents| | Go To Chapter 2 (Organizing for Project Management)| The Owners' Perspective Introduction The Project Life Cycle Major Types of Construction Selection of Professional Services Construction Contractors Financing of Constructed Facilities Legal and Regulatory Requirements The Changing Environment of the Construction Industry   Ã‚  Ã‚   The Role of Project Managers References Footnotes| | | 1. The Owners' Perspective 1. 1 Introduction Like the five blind men encountering different parts of an elephant, each of the numerous participants in the process of planning, designing, financing, constructing and operating physical facilities has a different perspective on project management for construction. Specialized knowledge can be very beneficial, particularly in large and complicated projects, since experts in various specialties can provide valuable services. However, it is advantageous to understand how the different parts of the process fit together. Waste, excessive cost and delays can result from poor coordination and communication among specialists. It is particularly in the interest of owners to insure that such problems do not occur. And it behooves all participants in the process to heed the interests of owners because, in the end, it is the owners who provide the resources and call the shots. By adopting the viewpoint of the owners, we can focus our attention on the complete process of project management for constructed facilities rather than the historical roles of various specialists such as planners, architects, engineering designers, constructors, fabricators, material suppliers, financial analysts and others. To be sure, each specialty has made important advances in developing new techniques and tools for efficient implementation of construction projects. However, it is through the understanding of the entire process of project management that these specialists can respond more effectively to the owner's desires for their services, in marketing their specialties, and in improving the productivity and quality of their work. The introduction of innovative and more effective project management for construction is not an academic exercise. As reported by the â€Å"Construction Industry Cost Effectiveness Project† of the Business Roundtable: [1] By common consensus and every available measure, the United States no longer gets it's money's worth in construction, the nation's largest industry †¦ The creeping erosion of construction efficiency and productivity is bad news for the entire U. S. economy. Construction is a particularly seminal industry. The price of every factory, office building, hotel or power plant that is built affects the price that must be charged for the goods or services produced in it or by it. And that effect generally persists for decades †¦ Too much of the industry remains tethered to the past, partly by inertia and partly by historic divisions†¦ Improvement of project management not only can aid the construction industry, but may also be the engine for the national and world economy. However, if we are to make meaningful improvements, we must first understand the construction industry, its operating environment and the institutional constraints affecting its activities as well as the nature of project management. Back to top 1. 2 The Project Life Cycle The acquisition of a constructed facility usually represents a major capital investment, whether its owner happens to be an individual, a private corporation or a public agency. Since the commitment of resources for such an investment is motivated by market demands or perceived needs, the facility is expected to satisfy certain objectives within the constraints specified by the owner and relevant regulations. With the exception of the speculative housing market, where the residential units may be sold as built by the real estate developer, most constructed facilities are custom made in consultation with the owners. A real estate developer may be regarded as the sponsor of building projects, as much as a government agency may be the sponsor of a public project and turns it over to another government unit upon its completion. From the viewpoint of project management, the terms â€Å"owner† and â€Å"sponsor† are synonymous because both have the ultimate authority to make all important decisions. Since an owner is essentially acquiring a facility on a promise in some form of agreement, it will be wise for any owner to have a clear understanding of the acquisition process in order to maintain firm control of the quality, timeliness and cost of the completed facility. From the perspective of an owner, the project life cycle for a constructed facility may be illustrated schematically in Figure 1-1. Essentially, a project is conceived to meet market demands or needs in a timely fashion. Various possibilities may be considered in the conceptual planning stage, and the technological and economic feasibility of each alternative will be assessed and compared in order to select the best possible project. The financing schemes for the proposed alternatives must also be examined, and the project will be programmed with respect to the timing for its completion and for available cash flows. After the scope of the project is clearly defined, detailed engineering design will provide the blueprint for construction, and the definitive cost estimate will serve as the baseline for cost control. In the procurement and construction stage, the delivery of materials and the erection of the project on site must be carefully planned and controlled. After the construction is completed, there is usually a brief period of start-up or shake-down of the constructed facility when it is first occupied. Finally, the management of the facility is turned over to the owner for full occupancy until the facility lives out its useful life and is designated for demolition or conversion. Figure 1-1:   The Project Life Cycle of a Constructed Facility Of course, the stages of development in Figure 1-1 may not be strictly sequential. Some of the stages require iteration, and others may be carried out in parallel or with overlapping time frames, depending on the nature, size and urgency of the project. Furthermore, an owner may have in-house capacities to handle the work in every stage of the entire process, or it may seek professional advice and services for the work in all stages. Understandably, most owners choose to handle some of the work in-house and to contract outside professional services for other components of the work as needed. By examining the project life cycle from an owner's perspective we can focus on the proper roles of various activities and participants in all stages regardless of the contractual arrangements for different types of work. In the United States, for example, the U. S. Army Corps of Engineers has in-house capabilities to deal with planning, budgeting, design, construction and operation of waterway and flood control structures. Other public agencies, such as state transportation departments, are also deeply involved in all phases of a construction project. In the private sector, many large firms such as DuPont, Exxon, and IBM are adequately staffed to carry out most activities for plant expansion. All these owners, both public and private, use outside agents to a greater or lesser degree when it becomes more advantageous to do so. The project life cycle may be viewed as a process through which a project is implemented from cradle to grave. This process is often very complex; however, it can be decomposed into several stages as indicated by the general outline in Figure 1-1. The solutions at various stages are then integrated to obtain the final outcome. Although each stage requires different expertise, it usually includes both technical and managerial activities in the knowledge domain of the specialist. The owner may choose to decompose the entire process into more or less stages based on the size and nature of the project, and thus obtain the most efficient result in implementation. Very often, the owner retains direct control of work in the planning and programming stages, but increasingly outside planners and financial experts are used as consultants because of the complexities of projects. Since operation and maintenance of a facility will go on long after the completion and acceptance of a project, it is usually treated as a separate problem except in the consideration of the life cycle cost of a facility. All stages from conceptual planning and feasibility studies to the acceptance of a facility for occupancy may be broadly lumped together and referred to as the Design/Construct process, while the procurement and construction alone are traditionally regarded as the province of the construction industry. Owners must recognize that there is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in construction management as well as the type, size and location of the project. It is important for the owner to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, owners should be concerned with the life cycle costs of constructed facilities rather than simply the initial construction costs. Saving small amounts of money during construction may not be worthwhile if the result is much larger operating costs or not meeting the functional requirements for the new facility satisfactorily. Thus, owners must be very concerned with the quality of the finished product as well as the cost of construction itself. Since facility operation and maintenance is a part of the project life cycle, the owners' expectation to satisfy investment objectives during the project life cycle will require consideration of the cost of operation and maintenance. Therefore, the facility's operating management should also be considered as early as possible, just as the construction process should be kept in mind at the early stages of planning and programming. Back to top 1. 3 Major Types of Construction Since most owners are generally interested in acquiring only a specific type of constructed facility, they should be aware of the common industrial practices for the type of construction pertinent to them. Likewise, the construction industry is a conglomeration of quite diverse segments and products. Some owners may procure a constructed facility only once in a long while and tend to look for short term advantages. However, many owners require periodic acquisition of new facilities and/or rehabilitation of existing facilities. It is to their advantage to keep the construction industry healthy and productive. Collectively, the owners have more power to influence the construction industry than they realize because, by their individual actions, they can provide incentives or disincentives for innovation, efficiency and quality in construction. It is to the interest of all parties that the owners take an active interest in the construction and exercise beneficial influence on the performance of the industry. In planning for various types of construction, the methods of procuring professional services, awarding construction contracts, and financing the constructed facility can be quite different. For the purpose of discussion, the broad spectrum of constructed facilities may be classified into four major categories, each with its own characteristics. Residential Housing Construction Residential housing construction includes single-family houses, multi-family dwellings, and high-rise apartments. During the development and construction of such projects, the developers or sponsors who are familiar with the construction industry usually serve as surrogate owners and take charge, making necessary contractual agreements for design and construction, and arranging the financing and sale of the completed structures. Residential housing designs are usually performed by architects and engineers, and the construction executed by builders who hire subcontractors for the structural, mechanical, electrical and other specialty work. An exception to this pattern is for single-family houses which may be designed by the builders as well. The residential housing market is heavily affected by general economic conditions, tax laws, and the monetary and fiscal policies of the government. Often, a slight increase in total demand will cause a substantial investment in construction, since many housing projects can be started at different locations by different individuals and developers at the same time. Because of the relative ease of entry, at least at the lower end of the market, many new builders are attracted to the residential housing construction. Hence, this market is highly competitive, with potentially high risks as well as high rewards. Figure 1-2:   Residential Housing Construction (courtesy of Caterpillar, Inc. ) Institutional and Commercial Building Construction Institutional and commercial building construction encompasses a great variety of project types and sizes, such as schools and universities, medical clinics and hospitals, recreational facilities and sports stadiums, retail chain stores and large shopping centers, warehouses and light manufacturing plants, and skyscrapers for offices and hotels. The owners of such buildings may or may not be familiar with construction industry practices, but they usually are able to select competent professional consultants and arrange the financing of the constructed facilities themselves. Specialty architects and engineers are often engaged for designing a specific type of building, while the builders or general contractors undertaking such projects may also be specialized in only that type of building. Because of the higher costs and greater sophistication of institutional and commercial buildings in comparison with residential housing, this market segment is shared by fewer competitors. Since the construction of some of these buildings is a long process which once started will take some time to proceed until completion, the demand is less sensitive to general economic conditions than that for speculative housing. Consequently, the owners may confront an oligopoly of general contractors who compete in the same market. In an oligopoly situation, only a limited number of competitors exist, and a firm's price for services may be based in part on its competitive strategies in the local market. Figure 1-3:   Construction of the PPG Building in Pittsburgh, Pennsylvania (courtesy of PPG Industries, Inc. Specialized Industrial Construction Specialized industrial construction usually involves very large scale projects with a high degree of technological complexity, such as oil refineries, steel mills, chemical processing plants and coal-fired or nuclear power plants. The owners usually are deeply involved in the development of a project, and prefer to work with designers-bu ilders such that the total time for the completion of the project can be shortened. They also want to pick a team of designers and builders with whom the owner has developed good working relations over the years. Although the initiation of such projects is also affected by the state of the economy, long range demand forecasting is the most important factor since such projects are capital intensive and require considerable amount of planning and construction time. Governmental regulation such as the rulings of the Environmental Protection Agency and the Nuclear Regulatory Commission in the United States can also profoundly influence decisions on these projects. Figure 1-4:   Construction of a Benzene Plant in Lima, Ohio (courtesy of Manitowoc Company, Inc. ) Infrastructure and Heavy Construction Infrastructure and heavy construction includes projects such as highways, mass transit systems, tunnels, bridges, pipelines, drainage systems and sewage treatment plants. Most of these projects are publicly owned and therefore financed either through bonds or taxes. This category of construction is characterized by a high degree of mechanization, which has gradually replaced some labor intensive operations. The engineers and builders engaged in infrastructure construction are usually highly specialized since each segment of the market requires different types of skills. However, demands for different segments of infrastructure and heavy construction may shift with saturation in some segments. For example, as the available highway construction projects are declining, some heavy construction contractors quickly move their work force and equipment into the field of mining where jobs are available. Figure 1-5:   Construction of the Dame Point Bridge in Jacksonville, Florida (courtesy of Mary Lou Maher) Back to top 1. 4 Selection of Professional Services When an owner decides to seek professional services for the design and construction of a facility, he is confronted with a broad variety of choices. The type of services selected depends to a large degree on the type of construction and the experience of the owner in dealing with various professionals in the previous projects undertaken by the firm. Generally, several common types of professional services may be engaged either separately or in some combination by the owners. Financial Planning Consultants At the early stage of strategic planning for a capital project, an owner often seeks the services of financial planning consultants such as certified public accounting (CPA) firms to evaluate the economic and financial feasibility of the constructed facility, particularly with respect to arious provisions of federal, state and local tax laws which may affect the investment decision. Investment banks may also be consulted on various options for financing the facility in order to analyze their long-term effects on the financial health of the owner organization. Architectural and Engineering Firms Traditionally, the owner engages a n architectural and engineering (A/E) firm or consortium as technical consultant in developing a preliminary design. After the engineering design and financing arrangements for the project are completed, the owner will enter into a construction contract with a general contractor either through competitive bidding or negotiation. The general contractor will act as a constructor and/or a coordinator of a large number of subcontractors who perform various specialties for the completion of the project. The A/E firm completes the design and may also provide on site quality inspection during construction. Thus, the A/E firm acts as the prime professional on behalf of the owner and supervises the construction to insure satisfactory results. This practice is most common in building construction. In the past two decades, this traditional approach has become less popular for a number of reasons, particularly for large scale projects. The A/E firms, which are engaged by the owner as the prime professionals for design and inspection, have become more isolated from the construction process. This has occurred because of pressures to reduce fees to A/E firms, the threat of litigation regarding construction defects, and lack of knowledge of new construction techniques on the part of architect and engineering professionals. Instead of preparing a construction plan along with the design, many A/E firms are no longer responsible for the details of construction nor do they provide periodic field inspection in many cases. As a matter of fact, such firms will place a prominent disclaimer of responsibilities on any shop drawings they may check, and they will often regard their representatives in the field as observers instead of inspectors. Thus, the A/E firm and the general contractor on a project often become antagonists who are looking after their own competing interests. As a result, even the constructibility of some engineering designs may become an issue of contention. To carry this protective attitude to the extreme, the specifications prepared by an A/E firm for the general contractor often protects the interest of the A/E firm at the expense of the interests of the owner and the contractor. In order to reduce the cost of construction, some owners introduce value engineering, which seeks to reduce the cost of construction by soliciting a second design that might cost less than the original design produced by the A/E firm. In practice, the second design is submitted by the contractor after receiving a construction contract at a stipulated sum, and the saving in cost resulting from the redesign is shared by the contractor and the owner. The contractor is able to absorb the cost of redesign from the profit in construction or to reduce the construction cost as a result of the re-design. If the owner had been willing to pay a higher fee to the A/E firm or to better direct the design process, the A/E firm might have produced an improved design which would cost less in the first place. Regardless of the merit of value engineering, this practice has undermined the role of the A/E firm as the prime professional acting on behalf of the owner to supervise the contractor. Design/Construct Firms A common trend in industrial construction, particularly for large projects, is to engage the services of a design/construct firm. By integrating design and construction management in a single organization, many of the conflicts between designers and constructors might be avoided. In particular, designs will be closely scrutinized for their constructibility. However, an owner engaging a design/construct firm must insure that the quality of the constructed facility is not sacrificed by the desire to reduce the time or the cost for completing the project. Also, it is difficult to make use of competitive bidding in this type of design/construct process. As a result, owners must be relatively sophisticated in negotiating realistic and cost-effective construction contracts. One of the most obvious advantages of the integrated design/construct process is the use of phased construction for a large project. In this process, the project is divided up into several phases, each of which can be designed and constructed in a staggered manner. After the completion of the design of the first phase, construction can begin without waiting for the completion of the design of the second phase, etc. If proper coordination is exercised. the total project duration can be greatly reduced. Another advantage is to exploit the possibility of using the turnkey approach whereby an owner can delegate all responsibility to the esign/construct firm which will deliver to the owner a completed facility that meets the performance specifications at the specified price. Professional Construction Managers In recent years, a new breed of construction managers (CM) offers professional services from the inception to the completion of a construction project. These construction managers mostly come from the ranks of A/E firms or general contractors who may or may not retain dual roles in the service of the owners. In any case, the owner can rely on the service of a single prime professional to manage the entire process of a construction project. However, like the A/E firms of several decades ago, the construction managers are appreciated by some owners but not by others. Before long, some owners find that the construction managers too may try to protect their own interest instead of that of the owners when the stakes are high. It should be obvious to all involved in the construction process that the party which is required to take higher risk demands larger rewards. If an owner wants to engage an A/E firm on the basis of low fees instead of established qualifications, it often gets what it deserves; or if the owner wants the general contractor to bear the cost of uncertainties in construction such as foundation conditions, the contract price will be higher even if competitive bidding is used in reaching a contractual agreement. Without mutual respect and trust, an owner cannot expect that construction managers can produce better results than other professionals. Hence, an owner must understand its own responsibility and the risk it wishes to assign to itself and to other participants in the process. Operation and Maintenance Managers Although many owners keep a permanent staff for the operation and maintenance of constructed facilities, others may prefer to contract such tasks to professional managers. Understandably, it is common to find in-house staff for operation and maintenance in specialized industrial plants and infrastructure facilities, and the use of outside managers under contracts for the operation and maintenance of rental properties such as apartments and office buildings. However, there are exceptions to these common practices. For example, maintenance of public roadways can be contracted to private firms. In any case, managers can provide a spectrum of operation and maintenance services for a specified time period in accordance to the terms of contractual agreements. Thus, the owners can be spared the provision of in-house expertise to operate and maintain the facilities. Facilities Management As a logical extension for obtaining the best services throughout the project life cycle of a constructed facility, some owners and developers are receptive to adding strategic planning at the beginning and facility maintenance as a follow-up to reduce space-related costs in their real estate holdings. Consequently, some architectural/engineering firms and construction management firms with computer-based expertise, together with interior design firms, are offering such front-end and follow-up services in addition to the more traditional services in design and construction. This spectrum of services is described in Engineering News-Record (now ENR) as follows: [2] Facilities management is the discipline of planning, designing, constructing and managing space — in every type of structure from office buildings to process plants. It involves developing corporate facilities policy, long-range forecasts, real estate, space inventories, projects (through design, construction and renovation), building operation and maintenance plans and furniture and equipment inventories. A common denominator of all firms entering into these new services is that they all have strong computer capabilities and heavy computer investments. In addition to the use of computers for aiding design and monitoring construction, the service includes the compilation of a computer record of building plans that can be turned over at the end of construction to the facilities management group of the owner. A computer data base of facilities information makes it possible for planners in the owner's organization to obtain overview information for long range space forecasts, while the line managers can use as-built information such as lease/tenant records, utility costs, etc. for day-to-day operations. Back to top 1. 5 Construction Contractors Builders who supervise the execution of construction projects are traditionally referred to as contractors, or more appropriately called constructors. The general contractor coordinates various tasks for a project while the specialty contractors such as mechanical or electrical contractors perform the work in their specialties. Material and equipment suppliers often act as installation contractors; they play a significant role in a construction project since the conditions of delivery of materials and equipment affect the quality, cost, and timely completion of the project. It is essential to understand the operation of these contractors in order to deal with them effectively. General Contractors The function of a general contractor is to coordinate all tasks in a construction project. Unless the owner performs this function or engages a professional construction manager to do so, a good general contractor who has worked with a team of superintendents, specialty contractors or subcontractors together for a number of projects in the past can be most effective in inspiring loyalty and cooperation. The general contractor is also knowledgeable about the labor force employed in construction. The labor force may or may not be unionized depending on the size and location of the projects. In some projects, no member of the work force belongs to a labor union; in other cases, both union and non-union craftsmen work together in what is called an open shop, or all craftsmen must be affiliated with labor unions in a closed shop. Since labor unions provide hiring halls staffed with skilled journeyman who have gone through apprentice programs for the projects as well as serving as collective bargain units, an experienced general contractor will make good use of the benefits and avoid the pitfalls in dealing with organized labor. Specialty Contractors Specialty contractors include mechanical, electrical, foundation, excavation, and demolition contractors among others. They usually serve as subcontractors to the general contractor of a project. In some cases, legal statutes may require an owner to deal with various specialty contractors directly. In the State of New York, for example, specialty contractors, such as mechanical and electrical contractors, are not subjected to the supervision of the general contractor of a construction project and must be given separate prime contracts on public works. With the exception of such special cases, an owner will hold the general contractor responsible for negotiating and fulfilling the contractual agreements with the subcontractors. Material and Equipment Suppliers Major material suppliers include specialty contractors in structural steel fabrication and erection, sheet metal, ready mixed concrete delivery, reinforcing steel bar detailers, roofing, glazing etc. Major equipment suppliers for industrial construction include manufacturers of generators, boilers and piping and other equipment. Many suppliers handle on-site installation to insure that the requirements and contractual specifications are met. As more and larger structural units are prefabricated off-site, the distribution between specialty contractors and material suppliers becomes even less obvious. Back to top 1. 6 Financing of Constructed Facilities A major construction project requires an enormous amount of capital that is often supplied by lenders who want to be assured that the project will offer a fair return on the investment. The direct costs associated with a major construction project may be broadly classified into two categories: (1) the construction expenses paid to the general contractor for erecting the facility on site and (2) the expenses for land acquisition, legal fees, architect/engineer fees, construction management fees, interest on construction loans and the opportunity cost of carrying empty space in the facility until it is fully occupied. The direct construction costs in the first category represent approximately 60 to 80 percent of the total costs in most construction projects. Since the costs of construction are ultimately borne by the owner, careful financial planning for the facility must be made prior to construction. Construction Financing Construction loans to contractors are usually provided by banks or savings and loan associations for construction financing. Upon the completion of the facility, construction loans will be terminated and the post-construction facility financing will be arranged by the owner. Construction loans provided for different types of construction vary. In the case of residential housing, construction loans and long-term mortgages can be obtained from savings and loans associations or commercial banks. For institutional and commercial buildings, construction loans are usually obtained from commercial banks. Since the value of specialized industrial buildings as collateral for loans is limited, construction loans in this domain are rare, and construction financing can be done from the pool of general corporate funds. For infrastructure construction owned by government, the property cannot be used as security for a private loan, but there are many possible ways to finance the construction, such as general appropriation from taxation or special bonds issued for the project. Traditionally, banks serve as construction lenders in a three-party agreement among the contractor, the owner and the bank. The stipulated loan will be paid to the contractor on an agreed schedule upon the verification of completion of various portions of the project. Generally, a payment request together with a standard progress report will be submitted each month by the contractor to the owner which in turn submits a draw request to the bank. Provided that the work to date has been performed satisfactorily, the disbursement is made on that basis during the construction period. Under such circumstances, the bank has been primarily concerned with the completion of the facility on time and within the budget. The economic life of the facility after its completion is not a concern because of the transfer of risk to the owner or an institutional lender. Facility Financing Many private corporations maintain a pool of general funds resulting from retained earnings and long-term borrowing on the strength of corporate assets, which can be used for facility financing. Similarly, for public agencies, the long-term funding may be obtained from the commitment of general tax revenues from the federal, state and/or local governments. Both private corporations and public agencies may issue special bonds for the constructed facilities which may obtain lower interest rates than other forms of borrowing. Short-term borrowing may also be used for bridging the gaps in long-term financing. Some corporate bonds are convertible to stocks under circumstances specified in the bond agreement. For public facilities, the assessment of user fees to repay the bond funds merits consideration for certain types of facilities such as toll roads and sewage treatment plants. [3] The use of mortgages is primarily confined to rental properties such as apartments and office buildings. Because of the sudden surge of interest rates in the late 1970's, many financial institutions offer, in addition to he traditional fixed rate long-term mortgage commitments, other arrangements such as a combination of debt and a percentage of ownership in exchange for a long-term mortgage or the use of adjustable rate mortgages. In some cases, the construction loan may be granted on an open-ended basis without a long-term financing commitment. For example, the plan might be issued for the construction period with an option to extend it for a period of up to three years in order to give the owner more time to seek alternative long-term financing on the completed facility. The bank will be drawn into situations involving financial risk if it chooses to be a lender without long-term guarantees. For international projects, the currency used for financing agreements becomes important. If financial agreements are written in terms of local currencies, then fluctuations in the currency exchange rate can significantly affect the cost and ultimately profit of a project. In some cases, payments might also be made in particular commodities such as petroleum or the output from the facility itself. Again, these arrangements result in greater uncertainty in the financing scheme because the price of these commodities may vary. Back to top 1. 7 Legal and Regulatory Requirements The owners of facilities naturally want legal protection for all the activities involved in the construction. It is equally obvious that they should seek competent legal advice. However, there are certain principles that should be recognized by owners in order to avoid unnecessary pitfalls. Legal Responsibilities Activities in construction often involve risks, both physical and financial. An owner generally tries to shift the risks to other parties to the degree possible when entering into contractual agreements with them. However, such action is not without cost or risk. For example, a contractor who is assigned the risks may either ask for a higher contract price to compensate for the higher risks, or end up in non-performance or bankruptcy as an act of desperation. Such consequences can be avoided if the owner is reasonable in risk allocation. When risks are allocated to different parties, the owner must understand the implications and spell them out clearly. Sometimes there are statutory limitations on the allocation of liabilities among various groups, such as prohibition against the allocation of negligence in design to the contractor. An owner must realize its superior power in bargaining and hence the responsibilities associated with this power in making contractual agreements. Mitigation of Conflicts It is important for the owner to use legal counselors as advisors to mitigate conflicts before they happen rather than to wield conflicts as weapons against other parties. There are enough problems in design and construction due to uncertainty rather than bad intentions. The owner should recognize the more enlightened approaches for mitigating conflicts, such as using owner-controlled wrap-up insurance which will provide protection for all parties involved in the construction process for unforeseen risks, or using arbitration, mediation and other extra-judicial solutions for disputes among various parties. However, these compromise solutions are not without pitfalls and should be adopted only on the merit of individual cases. Government Regulation To protect public safety and welfare, legislatures and various government agencies periodically issue regulations which influence the construction process, the operation of constructed facilities, and their ultimate disposal. For example, building codes promulgated by local authorities have provided guidelines for design and construction practices for a very long time. Since the 1970's, many federal regulations that are related directly or indirectly to construction have been established in the United States. Among them are safety standards for workers issued by the Occupational Health and Safety Administration, environmental standards on pollutants and toxic wastes issued by the Environmental Protection Agency, and design and operation procedures for nuclear power plants issued by the Nuclear Regulatory Commission. Owners must be aware of the impacts of these regulations on the costs and durations of various types of construction projects as well as possibilities of litigation due to various contentions. For example, owners acquiring sites for new construction may be strictly liable for any hazardous wastes already on the site or removed from the site under the U. S. Comprehensive Environmental Response Compensation and Liability (CERCL) Act of 1980. For large scale projects involving new technologies, the construction costs often escalate with the uncertainty associated with such restrictions. Back to top 1. 8 The Changing Environment of the Construction Industry The construction industry is a conglomeration of diverse fields and participants that have been loosely lumped together as a sector of the economy. The construction industry plays a central role in national welfare, including the development of residential housing, office buildings and industrial plants, and the restoration of the nation's infrastructure and other public facilities. The importance of the construction industry lies in the function of its products which provide the foundation for industrial production, and its impacts on the national economy cannot be measured by the value of its output or the number of persons employed in its activities alone. To be more specific, construction refers to all types of activities usually associated with the erection and repair of immobile facilities. Contract construction consists of a large number of firms that perform construction work for others, and is estimated to be approximately 85% of all construction activities. The remaining 15% of construction is performed by owners of the facilities, and is referred to as force-account construction. Although the number of contractors in the United States exceeds a million, over 60% of all contractor construction is performed by the top 400 contractors. The value of new construction in the United States (expressed in constant dollars) and the value of construction as a percentage of the gross national products from 1950 to 1985 are shown in Figures 1-6 and 1-7. It can be seen that construction is a significant factor in the Gross National Product although its importance has been declining in recent years. [4] Not to be ignored is the fact that as the nation's constructed facilities become older, the total expenditure on rehabilitation and maintenance may increase relative to the value of new construction. Figure 1-6:   Value of New Construction in the United States, 1975-1995 Figure 1-7:   Construction as Percentage of Gross Domestic Product in the United States, 1975-1995 Owners who pay close attention to the peculiar characteristics of the construction industry and its changing operating environment will be able to take advantage of the favorable conditions and to avoid the pitfalls. Several factors are particularly noteworthy because of their significant impacts on the quality, cost and time of construction. New Technologies In recent years, technological innovation in design, materials and construction methods have resulted in significant changes in construction costs. Computer-aids have improved capabilities for generating quality designs as well as reducing the time required to produce alternative designs. New materials not only have enhanced the quality of construction but also have shortened the time for shop fabrication and field erection. Construction methods have gone through various stages of mechanization and automation, including the latest development of construction robotics. The most dramatic new technology applied to construction has been the Internet and its private, corporate Intranet versions. The Internet is widely used as a means to foster collaboration among professionals on a project, to communicate for bids and results, and to procure necessary goods and services. Real time video from specific construction sites is widely used to illustrate construction progress to interested parties. The result has been more effective collaboration, communication and procurement. The effects of many new technologies on construction costs have been mixed because of the high development costs for new technologies. However, it is unmistakable that design professionals and construction contractors who have not adapted to changing technologies have been forced out of the mainstream of design and construction activities. Ultimately, construction quality and cost can be improved with the adoption of new technologies which are proved to be efficient from both the viewpoints of performance and economy. Labor Productivity The term productivity is generally defined as a ratio of the production output volume to the input volume of resources. Since both output and input can be quantified in a number of ways, there is no single measure of productivity that is universally applicable, particularly in the construction industry where the products are often unique and there is no standard for specifying the levels for aggregation of data. However, since labor constitutes a large part of the cost of construction, labor productivity in terms of output volume (constant dollar value or functional units) per person-hour is a useful measure. Labor productivity measured in this way does not necessarily indicate the efficiency of labor alone but rather measures the combined effects of labor, equipment and other factors contributing to the output. While aggregate construction industry productivity is important as a measure of national economy, owners are more concerned about the labor productivity of basic units of work produced by various crafts on site. Thus, an owner can compare the labor performance at different geographic locations, under different working conditions, and for different types and sizes of projects. Construction costs usually run parallel to material prices and labor wages. Actually, over the years, labor productivity has increased in some traditional types of construction and thus provides a leveling or compensating effect when hourly rates for labor increase faster than other costs in construction. However, labor productivity has been stagnant or even declined in unconventional or large scale projects. Public Scrutiny Under the present litigious climate in the United States, the public is increasingly vocal in the scrutiny of construction project activities. Sometimes it may result in considerable difficulty in siting new facilities as well as additional expenses during the construction process itself. Owners must be prepared to manage such crises before they get out of control. Figure 1-8 can serve to indicate public attitudes towards the siting of new facilities. It represents the cumulative percentage of individuals who would be willing to accept a new industrial facility at various distances from their homes. For example, over fifty percent of the people surveyed would accept a ten-story office building within five miles of their home, but only twenty-five percent would accept a large factory or coal fired power plant at a similar distance. An even lower percentage would accept a hazardous waste disposal site or a nuclear power plant. Even at a distance of one hundred miles, a significant fraction of the public would be unwilling to accept hazardous waste facilities or nuclear power plants. Figure 1-8:   Public Acceptance Towards New Facilities (Reprinted from Environmental Quality – 1980, the Eleventh Annual Report of the Council on Environmental Quality, U. S. Government Printing Office, Washington, DC, December 1980. ) This objection to new facilities is a widespread public attitude, representing considerable skepticism about the external benefits and costs which new facilities will impose. It is this public attitude which is likely to make public scrutiny and regulation a continuing concern for the construction industry. International Competition A final trend which deserves note is the increasing level of international competition in the construction industry. Owners are likely to find non-traditional firms bidding for construction work, particularly on large projects. Separate bids from numerous European, North American, and Asian construction firms are not unusual. In the United States, overseas firms are becoming increasingly visible and important. In this environment of heightened competition, good project management and improved productivity are more and more important. A bidding competition for a major new offshore drilling platform illustrates the competitive environment in construction. As described in the Wall Street Journal: [5] Through most of the postwar years, the nation's biggest builders of offshore oil platforms enjoyed an unusually cozy relationship with the Big Oil Companies they served. Their top officials developed personal friendships with oil executives, entertained them at opulent hunting camps- and won contracts to build nearly every major offshore oil platform in the world†¦. But this summer, the good-old boy network fell apart. Shell [Oil Co. awarded the main contract for [a new] platform – taller than Chicago's Sears Tower, four times heavier than the Brooklyn Bridge – to a tiny upstart. The winning bidder arranged overseas fabrication of the rig, kept overhead costs low, and proposed a novel assembly procedure by which construction equipment was mounted on completed sections of the platform in order to speed the completion of the entire structure. The result was lower costs than those estimated and bid by traditional firms. Of course, U. S. firms including A/E firms, contractors and construction managers are also competing in foreign countries. Their success or failure in the international arena may also affect their capacities and vitality to provide services in the domestic U. S. market. Contractor Financed Projects Increasingly, some owners look to contractors or joint ventures as a resource to design, to build and to finance a constructed facility. For example, a utility company may seek a consortium consisting of a design/construct firm and a financial investment firm to assume total liability during construction and thereby eliminate the risks of cost escalation to ratepayers, stockholders and the management. On the other hand, a local sanitation district may seek such a consortium to provide private ownership for a proposed new sewage treatment plant. In the former case, the owner may take over the completed facility and service the debt on construction through long-term financing arrangements; in the latter case, the private owner may operate the completed facility and recover its investment through user fees. The activities of joint ventures among design, construction and investment firms are sometimes referred to as financial engineering. This type of joint venture has become more important in the international construction market where aggressive contractors often win contracts by offering a more attractive financing package rather than superior technology. With a deepening shadow of international debts in recent years, many developing countries are not in a position to undertake any new project without contractor-backed financing. Thus, the contractors or joint ventures in overseas projects are forced into very risky positions if they intend to stay in the competition. Lean Construction Lean manufacturing† had a revolutionary effect on many industries, especially automotive assembly companies. Characteristics of this approach include: * Improvement in quality and reduction of waste everywhere. Rather than increasing costs, reducing defects and waste proved to improve quality and reduce costs. * Empowering workers to be responsible for satisfying customer needs. In construction, for example, craftsman should ma ke sure their work satisfied the design intent. * Continuous improvement of processes involving the entire workforce. Lean construction s intended to spread these practices within the construction industry. Of course, well managed construction projects already have many aspects of lean construction. For example, just-in-time delivery of materials is commonplace to avoid the waste of large inventory stockpiles. Green building projects attempt to re-use or recycle all construction wastes. But the systematic attention to continuous improvement and zero accidents and defects is new. Back to top 1. 9 The Role of Project Managers In the project life cycle, the most influential factors affecting the outcome of the project often reside at the early stages. At this point, decisions should be based on competent economic evaluation with due consideration for adequate financing, the prevalent social and regulatory environment, and technological considerations. Architects and engineers might specialize in planning, in construction field management, or in operation, but as project managers, they must have some familiarity with all such aspects in order to understand properly their role and be able to make competent decisions. Since the 1970's, many large-scale projects have run into serious problems of management, such as cost overruns and long schedule delays. Actually, the management of megaprojects or superprojects is not a practice peculiar to our time. Witness the construction of transcontinental railroads in the Civil War era and the construction of the Panama Canal at the turn of this century. Although the megaprojects of this generation may appear in greater frequency and present a new set of challenge, the problems are organizational rather than technical. As noted by Hardy Cross: [6] It is customary to think of engineering as a part of a trilogy, pure science, applied science and engineering. It needs emphasis that this trilogy is only one of a triad of trilogies into which engineering fits. This first is pure science, applied science and engineering; the second is economic theory, finance and engineering; and the third is social relations, industrial relations and engineering. Many engineering problems are as closely allied to social problems as they are to pure science. As engineers advance professionally, they often spend as much or more time on planning, management and other economic or social problems as on the traditional engineering design and analysis problems which form the core of most educational programs. It is upon the ability of engineers to tackle all such problems that their performance will ultimately be judged. The greatest stumbling block to effective management in construction is the inertia and historic divisions among planners, designers and constructors. While technical competence in design and innovation remains the foundation of engineering practice, the social, economic and organizational factors that are pervasive in influencing the success and failure of construction projects must also be dealt with effectively by design and construction organizations. Of course, engineers are not expected to know every detail of management techniques, but they must be knowledgeable enough to anticipate the problems of management so that they can work harmoniously with professionals in related fields to overcome the inertia and historic divisions. Paradoxically, engineers who are creative in engineering design are often innovative in planning and management since both types of activities involve problem solving. In fact, they can reinforce each other if both are included in the education process, provided that creativity and innovation instead of routine practice are emphasized. A project manager who is well educated in the fundamental principles of engineering design and management can usefully apply such principles once he or she has acquired basic understanding of a new application area. A project manager who has been trained by rote learning for a specific type of project may merely gain one year of experience repeated twenty times even if he or she has been in the field for twenty years. A broadly educated project manager can reasonably hope to become a leader in the profession; a narrowly trained project manager is often relegated to the role of his or her first job level permanently. The owners have much at stake in selecting a competent project manager and in providing her or him with the authority to assume responsibility at various stages of the project regardless of the types of contractual agreements for implementing the project. Of course, the project manager must also possess the leadership quality and the ability to handle effectively intricate interpersonal relationships within an organization. The ultimate test of the education and experience of a project manager for construction lies in her or his ability to apply fundamental principles to solving problems in the new and unfamiliar situations which have become the hallmarks of the changing environment in the construction industry. Back to top 1. 10 References 1. Au, T. and C. Hendrickson, â€Å"Education in Engineering Planning and Management,† Proceedings of the ASCE Conference on Civil Engineering Education, Columbus, Ohio, 1985. 2. Barrie, D. S. editor), Directions in Managing Construction, John Wiley and Sons, New York, 1981. 3. Lean Construction Institute, http://www. leanconstruction. org/ 4. Bonny, J. B. and J. P. Frein, Handbook of Construction Management and Organization, 2nd Edition, Van Nostrand Reinhold Co. , New York, 1980. 5. Hasagawa, Fumio et. al. , â€Å"Built by Japan,† John Wiley ; Sons, 1988. 6. Lang, J. E. and D. Q. Mills, The Construction Industry, Lexington Books, Lexington, MA, 1979. 7. Walker, N. , E. N. Walker and T. K. Rohdenburg, Legal Pitfalls in Architecture, Engineering and Building Construction, 2nd Edition, McGraw-Hill Book Co. , New York, 1979. Back to top 1. 11 Footnotes 1. The Business Roundtable, More Construction for the Money, Summary Report of the Construction Industry Cost Effectiveness Project, January 1983, p. 11. Back 2. â€Å"Hot New Market Lures A-E Players to Cutting Edges,† Engineering News-Record, April 4, 1985, pp. 30-37. Back 3. See Hendrickson, C. , â€Å"Financing Civil Works with User Fees,† Civil Engineering, Vol. 53, No. , February 1983, pp. 71-72. Back 4. The graph is derived from data in â€Å"Value of New Construction Put in Place, 1960-1983†, Statistical Abstract of the United States, 105th Edition, U. S. Department of Commerce, Bureau of Census, 1985, pp. 722-723, as well as the information in earlier editions. Back 5. See Petzinger, Thomas Jr. , â€Å"Upstart's Winning Bid for Offshore Platform Stuns its Older Rivals,† Wall Street Journ al, p. 1, c. 6, Nov. 20, 1985. Back 6. See H. Cross, Engineers and Ivory Towers, McGraw-Hill Book Co. Inc. , New York, 1952. Back Table of Contents| || Next Chapter| Go Up to Table of Contents| | Go To Chapter 2 (Organizing for Project Management)| The Owners' Perspective Introduction The Project Life Cycle Major Types of Construction Selection of Professional Services Construction Contractors Financing of Constructed Facilities Legal and Regulatory Requirements The Changing Environment of the Construction Industry   Ã‚  Ã‚   The Role of Project Managers References Footnotes| | | 1. The Owners' Perspective 1. 1 Introduction Like the five blind men encountering different parts of an elephant, each of the numerous participants in the process of planning, designing, financing, constructing and operating physical facilities has a different perspective on project management for construction. Specialized knowledge can be very beneficial, particularly in large and complicated projects, since experts in various specialties can provide valuable services. However, it is advantageous to understand how the different parts of the process fit together. Waste, excessive cost and delays can result from poor coordination and communication among specialists. It is particularly in the interest of owners to insure that such problems do not occur. And it behooves all participants in the process to heed the interests of owners because, in the end, it is the owners who provide the resources and call the shots. By adopting the viewpoint of the owners, we can focus our attention on the complete process of project management for constructed facilities rather than the historical roles of various specialists such as planners, architects, engineering designers, constructors, fabricators, material suppliers, financial analysts and others. To be sure, each specialty has made important advances in developing new techniques and tools for efficient implementation of construction projects. However, it is through the understanding of the entire process of project management that these specialists can respond more effectively to the owner's desires for their services, in marketing their specialties, and in improving the productivity and quality of their work. The introduction of innovative and more effective project management for construction is not an academic exercise. As reported by the â€Å"Construction Industry Cost Effectiveness Project† of the Business Roundtable: [1] By common consensus and every available measure, the United States no longer gets it's money's worth in construction, the nation's largest industry †¦ The creeping erosion of construction efficiency and productivity is bad news for the entire U. S. economy. Construction is a particularly seminal industry. The price of every factory, office building, hotel or power plant that is built affects the price that must be charged for the goods or services produced in it or by it. And that effect generally persists for decades †¦ Too much of the industry remains tethered to the past, partly by inertia and partly by historic divisions†¦ Improvement of project management not only can aid the construction industry, but may also be the engine for the national and world economy. However, if we are to make meaningful improvements, we must first understand the construction industry, its operating environment and the institutional constraints affecting its activities as well as the nature of project management. Back to top 1. 2 The Project Life Cycle The acquisition of a constructed facility usually represents a major capital investment, whether its owner happens to be an individual, a private corporation or a public agency. Since the commitment of resources for such an investment is motivated by market demands or perceived needs, the facility is expected to satisfy certain objectives within the constraints specified by the owner and relevant regulations. With the exception of the speculative housing market, where the residential units may be sold as built by the real estate developer, most constructed facilities are custom made in consultation with the owners. A real estate developer may be regarded as the sponsor of building projects, as much as a government agency may be the sponsor of a public project and turns it over to another government unit upon its completion. From the viewpoint of project management, the terms â€Å"owner† and â€Å"sponsor† are synonymous because both have the ultimate authority to make all important decisions. Since an owner is essentially acquiring a facility on a promise in some form of agreement, it will be wise for any owner to have a clear understanding of the acquisition process in order to maintain firm control of the quality, timeliness and cost of the completed facility. From the perspective of an owner, the project life cycle for a constructed facility may be illustrated schematically in Figure 1-1. Essentially, a project is conceived to meet market demands or needs in a timely fashion. Various possibilities may be considered in the conceptual planning stage, and the technological and economic feasibility of each alternative will be assessed and compared in order to select the best possible project. The financing schemes for the proposed alternatives must also be examined, and the project will be programmed with respect to the timing for its completion and for available cash flows. After the scope of the project is clearly defined, detailed engineering design will provide the blueprint for construction, and the definitive cost estimate will serve as the baseline for cost control. In the procurement and construction stage, the delivery of materials and the erection of the project on site must be carefully planned and controlled. After the construction is completed, there is usually a brief period of start-up or shake-down of the constructed facility when it is first occupied. Finally, the management of the facility is turned over to the owner for full occupancy until the facility lives out its useful life and is designated for demolition or conversion. Figure 1-1:   The Project Life Cycle of a Constructed Facility Of course, the stages of development in Figure 1-1 may not be strictly sequential. Some of the stages require iteration, and others may be carried out in parallel or with overlapping time frames, depending on the nature, size and urgency of the project. Furthermore, an owner may have in-house capacities to handle the work in every stage of the entire process, or it may seek professional advice and services for the work in all stages. Understandably, most owners choose to handle some of the work in-house and to contract outside professional services for other components of the work as needed. By examining the project life cycle from an owner's perspective we can focus on the proper roles of various activities and participants in all stages regardless of the contractual arrangements for different types of work. In the United States, for example, the U. S. Army Corps of Engineers has in-house capabilities to deal with planning, budgeting, design, construction and operation of waterway and flood control structures. Other public agencies, such as state transportation departments, are also deeply involved in all phases of a construction project. In the private sector, many large firms such as DuPont, Exxon, and IBM are adequately staffe