CHAPTER II
REVIEW OF
RELATED LITERATURE
This discussion presents the literature covering some issues of the small and medium enterprise (SME) in general and on construction firms in particular. Construction business is like any other enterprises, therefore many of business theories, methods and management are similar. Starting on the firm itself and its manager, owner and/or entrepreneur then focusing closer to the research domain, the levels “of knowledge and access to” business parameters, practices and skills, capability and projects. Management and entrepreneurship are then highlighted. Literatures or stories of entrepreneurs and other documented literatures are presented first then the related studies. Some references are having links (CTRL + click to follow the link or click reference if in website), if you are reading this with internet ready for instant access to additional information on the topic or subject.
2.1 The SME in Construction and its Manager,
Owner, and/or Entrepreneur
PESTG
- Political, Economic, Socio – Cultural, Technological, Geography- all of these environment seemed to be present
in the Lito Banal’s story. In
addition, his educational background,
experience, age and affiliations the environment were so right for him. He is a
building contractor while in his early
twenties as a civil engineering graduate of Mapua Institute of Technology in
Determined
to succeed; hard work, self-confidence, determination, and dedication to chosen
field as the key points to professional success. He become partner to a commercial roofing contractors, both partners
expanded through successful negotiations and acquisitions of major commercial
and industrial contracts despite the competitive construction industry. There is
always a church or an organization you can contact and from there, move on. The
intangible rewards of friendship and sharing are boundless. http://www.migrantnews.co.nz/Achivers.htm (M.Z. Coupe, Migrant News, 2005)
Shinryo (
This story,
the “Successful Microenterprise:
Balderama Story” is construction in nature, we can call the man “Ang
Panday”. In 1990, a neighbor who wanted to give Mr. Balderama some
business asked him to make a simple cabinet for him. He saved enough money to
buy the plywood and he would then go to construction sites to look for nails
that he could use for the cabinet. He sold the finished cabinet for PhP 200.00.
Out of this income, they bought another piece of plywood and made another
cabinet. ( http://www.microfinance.com.ph/stories/
)
This is one
story where there is no need of higher education, only a firm grip on vision,
risk taker and big, hairy audacious goals (BHAG). His vision is to be “ FedEx” ( see Section
2.4, Entrepreneurship & Entrepreneurial Skills ) of junk removal. Brian
Scudamore started his company 1-800-GOT-JUNK? in 1989 straight out of
high school with $700 and a beat-up old pick-up truck. Today they have 95
franchise partners across North America with a true national presence — they
are in 47 of
2.2 Level of Knowledge of
Strategic Plan
As a pre-requisite to developing a strategic plan, it is desirable to clearly identify the current status, objectives and strategies of an existing business or the latest thinking in respect of a new venture. Correctly defined, these can be used as the basis for a critical examination of existing or perceived Strengths, Weaknesses, Threats and Opportunities (SWOT). This then leads to strategy development covering the following issues: vision, mission, values, objectives, strategies, goals and programs.
Peter
Drucker set a “classic” definition of
strategic planning in his 1973 book in
mamagement. He indicated that planning was nothing new – it
was simply the organized performance of an old task. His definition was simple
– planning was the continuous process of
making entrepreneurial (risk taking) decisions systematically and with the best
possible sense of “futurity”, systematically organizing the efforts required to
carry out the decisions and then measuring the results of those decisions
against expectations (systematic feedback). His basic thesis was that organizations needed to
treat management (and therefore planning) as a disciplined science. With
discipline came the opportunity to learn from previous experience and to share
those experiences throughout an organization. Peter Drucker said
that if you don’t know where you’re going, any plan will do, and when
preparing the mission statement, it is time to ask some fundamental questions.
What is our business? Who is the customer? What is value to the customer? What
will our business be? What should our business be? ( http://www.beaconproject.org/strategi.htm#Definition)
Porter (1980) spearheaded the push to planning based on nature of external, competitive forces in an industry or business sector. Porter defined a planning model and process that was based on gaining an understanding of the competitive forces that define an industry and it’s attractiveness from a business perspective. Porter’s Five Forces model (see Fig. 2.1) is a planning framework based on the relationship between industry competitors, potential entrants, suppliers, buyers and substitutes, was ultimately created to help companies achieve profitability objectives.
Porter’s Five Forces model (see
Fig. 2.1)
click:
(http://www.quickmba.com/strategy/porter.shtml
)
Nevertheless, the underlying theory suggested that the concept or practice of better understanding of external environments could be transferred to other sectors, including not-for-profit and government organizations. Michael Porter described a concept that has become known as the "five forces model" (http://www.quickmba.com/strategy/porter.shtml ). This concept involves a relationship between competitors within an industry, potential competitors, suppliers, buyers and alternative solutions to the problem being addressed.
One of the early “modern” conceptual frameworks for business planning was developed by Igor Ansoff. The Ansoff Matrix, Source: H. Igor Ansoff, “Strategic Diversification” , Harvard Business Review, September-October 1957; http://homepages.wmich.edu/~mmccardle/Files/Strategy/Strategy%20Intro%20Fall05%20-%20net.ppt ) an approach based on the concept that there were only four ways an organization could expand it’s markets or overall business performance, was also sited by Woyzburn. These were: selling more of the same products to existing customers; selling new products to existing customers; selling existing products to new customers; and selling new products to new customers. The inherent risk of each approach increased as the organization moved away from familiar products and clients to unfamiliar clients and new products.
The picture shown below (Fig. 2.2) is the most strategic rhyme more than a
hundred years ago.
(Fig. 2.2)
See site add-on
Power Point Presentation
The concept of strategic planning had been
with us since man has to get from “point A” to “point B”. Most planning organizations are very familiar
with the teachings of Sun Tzu who wrote of warfare and the strategic
underpinnings of success in 500BC. In fact the word strategy stems from the
Greek strategos which means the art of the General or Commander-in-Chief. It
was even alluded to by Lewis Carol in Through The Looking Glass (Robert
Woyzburn, 2002). http://www.the-marketing-works.com/pdf/planning.pdf
A critical review of past performance by the owners and management of a business and the preparation of a plan beyond normal budgetary horizons require a certain attitude of mind and predisposition. Some essential points which should to be observed during the review and planning process include the following: relate to the medium term i.e. 5 years or even more, be undertaken by owners/directors, focus on matters of strategic importance, be separated from day-to-day work, be realistic, detached and critical, distinguish between cause and effect, be reviewed periodically and write it down. If you don't know where your business is going, any road will get you there (Planware, 2005). http://www.planware.net/pressreleases/article.php?c=1-4-05_Wethersfield.txt
Marketing Plan
Many of the parts and contents are similar to the strategic plan but it must be included. These discussions here, business and financial plans are taken from Planware (2005). The executive summary must not be more than two pages. It should be very easy to understand and clear. It should contain all the most salient points of the plan. The following are the content of a conceptual marketing plan ( the target reader should also be considered): Company Description - This part should highlight the recent company history and successes of the organization.; Strategic Focus and Plan - This section should cover aspects of corporate strategy that influence the marketing plan. are (a) Mission/Vision, (b) goals, and (c) core competencies/ sustainable competitive advantage; Situation Analysis - The situation analysis focuses on the “where are we now”, the SWOT in the strategic plan; Situation Analysis - This section describes the five-year marketing and product objective for company and the target markets in the area of operation, points of difference, position of its line of products and services; Marketing Program - The four marketing mix elements are detailed here, product, price, promotion, place. (product include services); Financial and Data Projections; A mathematical model of the company ---- 5 year projection; Organization - Organizational chart and breakdown of jobs; Implementation Plan - Timetable, benchmarks , bar chart with an S-curve is recommended. This includes budgeting; and Evaluation and Control - Comptrollership, measurements of actual results against actual results and balance scorecards.
There are many of the items here that are practically a part of other plans, for example projections are part of financial plan.
Business Plan
A business plan is a plan that enables a business to look ahead, allocate resources, focus on key points and prepare for problems and opportunities presented by changing business environment. Generally people think of business plans, first for starting a new business or applying for business loans. However, business plans are also vital for managing an existing business, whether or not the business needs new loans or new investments. Businesses need plans to optimize growth and development according to plans and priorities.
A business plan acts as a communication tool, which can be used to attract investment capital, secure loans, and assist in attracting strategic business partners. As a management tool, a business plan helps in tracking, monitoring and evaluating the progress of a business. As a planning tool, the business plan guides an entrepreneur through the various phases of the business, which helps in identifying roadblocks and obstacles that can be avoided (Planware, 2005)..
Financial
Plan
Many of the financial plan concepts had been discussed in
the marketing plan. A very important part
which almost all, specially SME, businessman forget about is the cash
flow in addition to the balance sheet
and the income statement. A 5-year projection will be sufficient for many uses
as in loans. A project with a longer life or payback period will need a longer
projection. Financial statements are commonly done only when filing a BIR
returns or tax purposes or for complying only a requirement of a loan. But a
financial plan is much more than that.( DTI, http://www.dti.gov.ph/contentment/66/69/555.jsp
)
Engineering Construction Technology
The SME in construction sector is important as it is a major employer, and one with reasonable equity benefits in terms of distribution of income. A strong SME in construction sector is critical in terms of the goods (materials) and relatively cheap services it provides to large enterprises and to informal, micro-enterprises. It is suggested that a technologically strong SME in construction system in developing areas will also be necessary to develop, attract and work with large enterprises.
Here is a company that emphasizes and give importance
to mission, vision, environment and health and safety. The mission state
that “ Engineering never runs out of
room for improvement. With the
ever-changing construction technology man has continuously formulated
innumerable impeccable ways of building exquisite structures. In like manner, Monolith Construction &
Development Corporation (MCDC, 2005) believes that the ultimate goal of
construction is high quality attained through workable means without laying on
the line the preservation of the health and safety of MCDC staff and employees
and the general public, as well as, the protection of the environment” while its vision is “ to
become a living instrument of high quality creation and be of ultimate service
to the construction world” . It must be worth noting that the construction is
relatively large, but the sub-contractors are well within SME level. (http://www.monolithconstruction.com/)
In the Philippines, many of the larger companies are working with and hiring many sub-contractors that are SME in construction and some of these companies are First Philippine Holdings Corporation (http://www.fphc.com) whose businesses are Businesses in banking, finance & leasing, construction & construction materials, electronics & technology telecommunication and other manufacturing; Jardine Davies, Inc. (http://www.jardinedavies.com) who are involved in the distribution of building and industrial materials and agricultural chemicals; and PHINMA Group (http://www.phinma.com) involved in services include property and shelter, energy, education, financial services and foundations
2.3 Level of Access to
Marketing Facilities
Myrna Rodriguez-Co , Contributor, UP ISSI and Inquirer News Service posted this short
write-up which is very important in marketing a construction business be it SME
or bigger in the Philippines. Many big institutions--public and private--have
their own contractor accreditation schemes. Ask how you might be able to break
in. Usually, they would require you to submit your own portfolio of
accomplished construction projects. Better if you have pictures to show. Best
of all, the edifices you've built--no matter how few--should be able to stand
close scrutiny, as they now stand.
How are you as a networker? It seems to me that aggressive and patient networking is the way to go for "struggling" contractors. Of course, putting up a network is not a simple as it sounds. You have to patiently, constantly, and deliberately meet people and approach institutions. It means developing contacts that would lead you to more contacts. Myrna Rodriguez – Co wrote further that the obvious place to network is your own social circle. Start with your community. If it is a growing village or barangay, so much the better. Are you active in your homeowners association? What about civic associations like the Jaycees or the Rotarians? Are you with religious communities like Couples for Christ and Marriage Encounter? Members of the Iglesia ni Kristo church, for example, are well known for taking care of their own.
While you're at it, start tracing your school chums,
your fraternity brothers, your barkada
(gang) during your heydays. They have grown up, like you, with their own
families, affiliations and networks. Join reunions. If you are not yet with a
group, consider joining some, the better to disseminate your business card and
reputation around. It will also help to join contractor's associations. Make
the acquaintance of your local congressman; look for a go-between. In the
http://money.inq7.net/features/view_features.php?yyyy=2003&mon=10&...&file=2
Objectives of Department of Trade and Industry (DTI) are the
marketing development programs of the National SME Development Agenda seek to
increase exposure of SME products in domestic and foreign markets. They also
seek to improve distribution of SME products among and between the local
manufacturing and trade sectors. Although on this documentation construction is
not a priority, it is included on many of its programs. The marketing
programs include Trade
Fairs - Virtual & Physical, Buying & Selling Missions, Permanent
Mini-Philippines SME Trade Houses, Buyer-Supplier Matching, Tradeline
DTI has already been able to assist
thousands of SMEs nationwide in their endeavor to take their enterprises to a
higher level. Targeted and collaborative interventions in financing, marketing,
training, product development/technology intervention, and advocacy have
resulted in higher business performance for many of these companies, as
measured in their assets, employment, and sales.
Financial Facilities
One of the many banks that provides for the SME in
construction is the Planters Development Bank (http://www.fao.org/ag/ags/agsm/Banks/banks/philipp3.htm). The term
loan whose program objectives are to provide loans for fixed asset acquisition and
permanent working capital requirements. Eligible
borrowers are individuals, partnerships
and corporations having an asset size of not less than P1.5 Million; companies engaged in the business for at
least three years; and companies operating profitably for the last three years.
The loan purpose is for
permanent working capital; fixed
Asset Acquisition such as purchase of machines, construction/ renovation of
building/plant facilities. The terms and/or requirements are
amount minimum of P5.0 Million
and maximum of P30.0 Million.
Interest
charges are prevailing bank lending rate available at variable or fixed rate
options.
The
maturity/repayment is maximum of ten years, payable monthly or
quarterly. The security of loan is Real Estate Mortgage
(REM) or a combination of REM/ Chattel Mortgage. This program is certainly good for SME in
construction. (http://www.aaadir.com/banks/bank_detail.jsp?ID=9794
or http://www.plantersbank.com.ph/sme-news-02152006-01.html)
Looking back at the requirements of
this type of loans, security is the hardest to be satisfied if not properly
qualified SME in construction owners. A real estate or residential and
commercial properties that are easily marketable. The chattel mortgage,
especially machineries are not so readily acceptable, it is written there but
banks seldom approves it as collateral. The amount of loan will be
about 60% of the property valuation. Interest rates are dependent on the risk of the bank in
evaluating the borrower. The repayment
period depends on the type of
loan but banks normally offers 5 – 10
years for a long term loan. A very careful study of these bank loans, it
suggest normal treatment on construction SME, that is like that of non-SME
borrowers.
Financing assistance, (http://www.dti.gov.ph/contentment/66/69/555.jsp ), are available in the DTI supported programs and some information are extracted in the following explanations. This financing assistance is more accessible to construction SME as they are really programs geared towards helping them. There are additional requirements which are listed on the website of DTI.
In support of the National SME Development Plan, the
government financial institutions (GFIs) collaborated to design a uniform
lending program, tailored fit to meet the funding needs of SMEs. Under the
unified lending program, the participating GFIs shall apply simplified and
standardized lending procedures and guidelines, e.g., loan purpose, fee structures,
interest rates, application forms, financial ratios, and other lending
parameters, for evaluating the loan applications of SMEs. To adopt to the financing needs of SMEs, two
types of loans are available under the program are short term loans payable in
one year, and long term loans that are
payable up to five years.
The unified lending scheme is in addition to the existing
financial services of the participating GFIs. The long term of up to 5 years is
not really long enough, but these are the available terms. The type of loans may be funded are for short-term loans, the entrepreneur may tap the program either
for export financing (export packing credit) or a credit line for temporary
working capital. and for long term
loans, SMEs may apply for loans for permanent working capital, or to purchase
equipment, a lot or to construct a building or warehouse.
Interested entrepreneurs may approach the head office or branches of any of the following GFIs : Development Bank of the Philippines (http://www.devbankphil.com.ph/), Land Bank of the Philippines (http://www.landbank.com/), National Livelihood Support Fund (http://www.ops.gov.ph/records/eo_no362.htm), Small Business Guarantee and Finance Corp. (http://www.sbgfc.org.ph/), Philippine Export-Import Credit Agency (http://zeus.philexim.gov.ph/).
Engineering Construction Technology
Facilities
Design and construction of advanced technology facilities requires a significant investment in both money and personnel resources. To add to the challenge, time-to-market is often a primary driver. Design and construction schedules for larger projects have been compressed . This presents several key challenges to the designer, most notably, how to
define criteria and make key technical decisions quickly, in a manner that can be communicated and coordinated with many parties simultaneously. Often, decisions must
be made based on assumptions regarding the requirements of manufacturing technologies and tools that are still in development. Application of systems engineering concepts to a complex facilities design problem offers many advantages to the design team, constructor, and owner. It allows the team to clearly define the requirements and criteria (or make
necessary assumptions) before significant design effort is expended, and allows different design elements to progress at different schedules to suit the availability of information while still maintaining pre-defined system interrelationships. (INOCOSE, 2001), http://www.incose.org/sfbac
Another project in
A construction
facility that poses hazards and
long-term construction can undermine a school's goal of providing a
comfortable and attractive campus experience. Construction sites can pose
safety risks for students and staff who have to pass by heavy equipment and
other construction elements on their way around campus. And safety is even more
of a concern during weekends, when partying students may be less aware of
potential hazards. One potential solution to these challenges that university
officials generally overlook is modular housing. Modular — or manufactured —
housing has been around for more than a century. With modular, individual
modules are built off-campus in a factory to the specifications of campus
planners or architects. When complete, the newly constructed residences are
transported to campus and put in place. (
More discussion on engineering construction facilities an the following sources: A Project Primer , Aug 1, 2004, by John E. Osborn, (http://asumag.com/Construction/university_project_primer/); Smooth Operations, Nov 1, 2004, by Jeffrey M. Paul, (http://asumag.com/Construction/university_smooth_operations/); Building Green, May 1, 2004, by Mike Kennedy, (http://asumag.com/Construction/university_building_green/); and Facility Planing: What is Flexibility? Apr 1, 2004, by James E. Rydeen, (http://asumag.com/Construction/university_flexibility/).
Training and Networking facilities
Training
Facilities
Training programs are available for construction people and they are quite accessible in Metro Manila. The Construction Manpower Development Foundation (CMDF) comes up with relevant strategies and an overall construction manpower development plan. It also develops and implements manpower training and certification programs. Human resources development covers skilled craftsmen, engineers, supervisors, managers, and contractors.
The
CDMF conducts training and certification on Construction Management Series: for
supervisors and managers, Construction Technology Awareness and Improvement
Series: for engineers and other technical personnel, Trainers' Training on
Occupational Safety and Health: for safety and health officers, Basic
Construction Technology Series: for skilled construction craftsmen, Construction
Managers' Training and Certification Program (CTF): to train, evaluate and
certify engineers at supervisory and managerial level and provides information
on productivity and management for continuing technology and management
upgrading. (http://www.mydestiny.net/~cmdf/)
There are other
agencies providing training to entrepreneurs and their respective
personnel. It mostly handled by
government agencies and they are on most cases in Metro Manila with very few of
these facilities in the provinces. There
is another training facilities, the training and
entrepreneurship development programs of the National SME Agenda seek to
provide existing and potential entrepreneurs with the necessary skills and
knowledge to become competitive players in the local or global market. It also
seeks to create a pool of SME trainers, advisors and counselors who can
effectively assist SMEs nationwide.
The
training programs are Entrepreneurship & Skills Training for Potential
Entrepreneurs, Training on Specific Skills and Knowledge, Skills Upgrading for SME Service Providers
and Business Management Competency Courses and the training agencies are Philippine
Trade Training Center, DTI (PTTC), (http://www.dti.gov.ph/contentment/37/index.jsp
or at www.dti.gov.ph/contentment/7/8/754.jsp); Cottage Industry Technology Center (CITC),
(see the http://www.coa.gov.ph/COA_htm/2000_AAR/GOCCs/CITC/CITC_es00.htm); UP
Institute for Small-Scale Industries (UP-ISSI), (http://www.upd.edu.ph/~issi/aboutus.htm); Technology
Livelihood & Resource Center (TLRC),( http://www.tlrc.gov.ph/
); Technical Education & Skills Development
Authority (TESDA), (http://www.tesda.gov.ph/ ); and DOST
Technology Training Center, ( http://www.dost.gov.ph/media/article.php?sid=35
); Technology Application and Promotion Institute
(TAPI), ( http:// www.tapi.dost.gov.ph )
Many of these agencies are not
specifically for construction but certainly TESDA and DOST caters the
construction industry. The programs are
certainly good for the SME in construction. The
compendium of 2004 HRD and Entrepreneurship Training Programs for SMEs being offered
by government training institutions is done in support of the National SME
Development Agenda, a priority program of H.E. President Gloria Macapagal
Arroyo. The Department of Trade and
Industry is the lead government agency tasked to implement the Agenda and provide
SMEs with seamless access to government agencies.
HRD and
Entrepreneurship Training is one of five core elements of the Agenda including
financing, marketing, product development and technological intervention,
advocacy for an enabling environment. Management, and Construction
Safety & Health. The training and entrepreneurship development programs of the National
SME Agenda seek to provide existing and potential entrepreneurs with the
necessary skills and knowledge to become competitive players in the local or
global market. It also seeks to create a pool of SME trainers, advisors
and counselors who can effectively assist SMEs nationwide. Some of the training
available in construction are Construction Project Management, Construction
Project Contract, Construction Project Quality, Construction Project Time,
Construction Cost
Networking Facilities
There are two linkage facilities described here,
the CMDF a government organization and “Globalpinoy” an NGO. The Construction Manpower Development Foundation
(CMDF) comes up with relevant strategies and an overall construction manpower
development plan. It also develops and implements manpower training and
certification programs. The CMDF establishes network linkages with industry and
professional associations, universities, government intra-agencies and local
government units in the implementation of its key programs.
Contracting & Managing Construction Business
contacts and linkages can also be made possible by the GLOBALPINOY
CHAMBER OF SMALL AND MEDIUM ENTERPRISES, Inc.
is a non-profit, dynamic, vision and program oriented NGO based in
There is therefore an urgent need to
correct this anomaly that has left our country behind in economic development.
This is most crucial as the whole world economy now faces the onslaught of
globalization, a trend which cannot be stopped and will not be stopped . Our
country drastically requires the development of a mass-based entrepreneurial
class if we are to survive globalization. A country of employees such as ours
will always have a government that is beholden to multinational companies. (http://www.geocities.com/pinoyvip/entrepinoy.htm)
2.4 Practices
and Skills
Management
Construction management has encountered a number of schools of thought. Succeeding schools of thought about management modify and extend existing ones but not supersede them as they still continue to exercise sway over ways in which organizations operate. ( http://www.misronet.com/construction_management.htm ). By tracing the evolution of management as a discipline, four major schools of thought can be recognized; Classical approach (1900), Human relations approach (1925), Systems approach (1950) and contingency approach (1975). The system approach is used at the theoretical framework of this study (Sec. 1.4). After presenting the evolution of management, then some of the practices of construction management is discussed.
Evolution of Management
1- Classical Approach to Management:
Scientific
management: Introduced by Fredrick Winslow Taylor (1856-1917).
By scientific management
Administrative
management: Introduced by Henri Fayol (1841-1925)
Fayol's
definition of management was in terms of five functions: To forecast and plan: "Examining the
future and drawing up the plan of action" ; To organize: "building the structure, material, and
human of the undertaking"; To command: "marinating activity among
personnel"; To coordinate:
"binding together, unifying and harmonizing all activity and
effort"; To control: "seeing
that everything occurs in conformity with established rule and expressed
command"
Bureaucratic
Model: Introduced by Max Weber (1864-1920).
Weber was concerned with the way in which authority was
exercised within organizations. Authority, where orders are voluntarily obeyed
by those receiving them, was distinguished from power, which is the ability to
force people to obey. Weber describes three types of organizations based on the
way in which authority is legitimized. Charismatic form of organization in
which authority is based on the personal qualities of the leader, traditional
organizations in which the bases of authority are precedent and usage, and
rational-legal in which authority stems from holding a particular position in
the organization.
2- Human
Relations Approach
The founder of the Human relations approach is widely
recognized to be Elton Mayo, who undertook what became known as
3- Systems
Approach (was discussed in Sec. 1.4)
The key concepts of the systems approach evolved in
response to a rapidly changing environment. It expanded on the previous schools
of thought in two ways: The focus of
the systems theory is the whole organization comprising a set of interacting
sub-systems; and The relationship between the organization and its environment
is a central concern of the systems theory.
4- Contingency Approach
The most recent school of thought about management. It
combines the other three approaches and states management actions cannot always
relate either to general or unique circumstances but depend on contingency
factors and circumstances. In other words, the way in which an organization
organizes and manages its tasks is contingent on the circumstances in which it
operates.
Management Practices & Managerial
Skills
Strategic management concepts, nature of strategic decisions and the necessity of strategy in the construction industry to make it secure from surprises. The strategic management role can be filled by an internal individual or team or an external consultant or executive director. A combination of both internal and external modes is sometimes used.
The timing of the strategic management is crucial to its success. Finding time to do it is also vital. There is no "best" strategy which is applicable in all circumstances. A contingency approach to strategic management is essential, based on the objectives of strategic managers.
( Misronet, Inc, 2005). ( http://www.misronet.com/strategic_management.htm ). A mission statement of Strategic Construction Management, Inc. (SCMI, 2005), ( http://strategic-cm.com/main/firmoverview.htm ) will continually strive to provide superior service with the highest level of integrity. We will make a difference to our clients and community. Our focus remains firmly on our clients through pro-active communication, collaboration, leading edge technology, and good old-fashioned hard work. We succeed through pro-active communication, close collaboration, extraordinary attention to detail, field-proven techniques, and an unsurpassed work ethic. The following also discussed the practice of strategic management and other business elements as marketing and financing: Langford, D and Male, S (2000), ( http://www.blackwellpublishing.com/book.asp?ref=0632049995 ); U.S. Small Business Administration, ( www.sba.gov/library/pubs/mp-5.doc ).
The above literatures are business management in a construction firm, safety
and health is another important aspect of managing a (small) construction firm.
Lauren Pinch (2005?), tells about TerWisscha
Construction, Inc.,
Other sources of safety literatures in construction are Associated Builders and Contractors of Western Washington, http://www.abcwestwa.org/safety.htm (2005) ;
Debra Sharpe discusses and presented OSHA at http://www.auburn.edu/administration/safety/constclass/constsafetysessionf4.ppt ; and the Philippines ratified the Safety and Health in Mines Convention (No. 176, 1995) http://www.itcilo.it/actrav/english/calendar/2001/a3_2387/resource/thiesson/machida_article.htm, (1998 ).
Entrepreneurship (practice) and Entrepreneurial Skills
Federal Express (Fedex) is
now one of the largest in the world in air delivery system owning fleets of
Boeing and Airbus aircraft today. It is
practically everywhere, the Pacific Hub is in Subic Industrial Estate, Olongapo.
It has a branch in
Federal Express Corp is the premier global provider of transportation, e-commerce and supply chain
management services. The company offers
integrated business solutions thru a network of subsidiaries that operate
independently yet compete collectively.
Founded by Frederick W Smith, Chairman and President. Born in 1944
in Marks,
Based in
Robert Francisco, 39 BOYD COFFEE: “ What sets us apart from the competition is that we choose whom to supply coffee to. It's not niche marketing; it's customizing a market for those who want to be special. The special attention we give to coffee is what makes us special. We're also a one-stop shop selling coffee machines.” Rowena Galang, 34 ETC. CARTS: I invested P600,000 in Etc. Carts Inc. Rowena recouped her investment in two years. With Etc. her time is her own. Rowena has this to say “as an entrepreneur you have to be creative and have lots of stamina and guts. You must work hard. You must know your market and give it the best quality, price, and service. You must make your customers feel good so they'll keep coming back
( http://www.entrepreneur.com.ph/cover/inspiring_stories_18_entreps2.html
).
Born in 1916, Ewing Marion Kauffman was an entrepreneur, Major League Baseball team owner and philanthropist. He believed his success was a direct result of one fundamental philosophy: Treat others as you would like to be treated. The people in the company were called associates, not employees, all are stockholders. Two basic philosophies of the company: a) those who produce should share in the results or profits and b) treat others as you would like to be treated. There were 3400 associates, 360 become millionaires. As of 1993, it has over 9000 associates and sold over US$ 3 billion, (Hisrich and Peters, 2002), ( http://www.kauffman.org/ewingkauffman.cfm ).
With
a belt and a purse, Lillian Vernon launched a business that is now the only
woman-owned firm on the American Stock Exchange. At 23,
Challenges
facing entrepreneurs are: businesses
are run with relatively high losses and inefficiencies without knowing actual
figures!; major decisions are not prepared and evaluated in necessary detail,
compared by consequences, optimized and monitored in implementation; and the
potential is underutilized, developments are risky, results may be
unpredictable and unexpected. Entrepreneurs & management of SMEs need
assistance in bringing up: culture
in business planning, monitoring and measurement; understanding and using Total
Quality Management principles; structured practical management in Continuous Improvement; resources and
knowledge to introduce and effectively use IT tools for business monitoring,
measurement and decision preparation; obtaining know-how and training in
performance management (lack of time and funds for training, its well
targeting, etc); and assistance by Regional Governments, Associations,
Chambers, etc. in building capacity to improve the situation. (Enterprise
Performance Improvement Centre, GOLEM
IMS GMBH,
2.5 Related
Studies
The traditional theories explaining strategy focus on the more deliberate mechanistic and structured approaches and view strategy development as a systematic and linear process emphasizing the final output, which is the strategic plan. The more recent approaches focus on the ability of the firm to adjust to their competitive environment and the need for a less structured more emergent approach emphasizing the process of strategy development. This emphasizes the importance of a strategic thinking culture in the firm. Strategy and strategic management literature is characterized by a number of different definitions which emphasize and prioritize the planning element in the context of the larger firm. This bias towards the large firm context poses difficulties not only for the researcher but also for the practitioner in the small firm who is grappling with many theoretical concepts, which are not relevant or realistic to their specific situation (Briga Hynes, 2000), www.sbaer.uca.edu/research/icsb/2003/papers/335.doc
Ian Fillis (2003), said that barriers to small firm growth traditionally relate to severe resource limitations, ranging from the financial to the human resource and managerial competency dimensions Existing marketing theory can only go so far in its usefulness and applicability. Fillis further offers some thoughts about alternative approaches to researching the smaller firm in general, while also offering some insights into particular small firm situations in the arts and within the process of internationalization. Research at the marketing and entrepreneurship interface is offered as a refreshing alternative and more viable paradigm of small firm marketing. Within this overlapping research discipline, creativity is a potential answer to overcoming severe resource constraints and the ineffectiveness of current marketing principles to account for actual small firm behavior. Within the context of the owner/manager and the smaller firm, incremental creativity, both in terms of developing new products and services within niche markets, and in terms of providing the necessary environment for the stimulation of new ideas and knowledge is a better alternative to existing ineffective prescriptions.
( http://www.stir.ac.uk/Departments/management/ent/resmark.htm )
Baharun, Rohaizat,
et. al, (2005) examine the existing
practice in managerial strategic and tools being used and problems faced by
local Small Medium Enterprises (SMEs). Most SMEs operates with limited
resources. With today’s arduous competition, it requires the SMEs to tune its
current business practice to cope with the rapid changes in the business
environment. Due to the rapid changes, it requires the SMEs managers to be
equipped with new knowledge and ideas to promote effective managerial
practices. In other word, SMEs need to have better trained managers,
knowledgeable in managerial activities. Focus should be on the knowledge on
financial management, human resource management and marketing management
technique. This study empirically investigates the differences in the
managerial practices of SMEs in the Malaysian Manufacturing sector. The most
important findings of the study on managerial practices are that the SMEs
appear to have a very limited knowledge of the overall spectrum of managerial
practices. The purpose of this paper has been to provide some evidence
regarding the SMEs’ managerial practices and problems. With respect to the
practices, the findings suggest that SMEs are generally not aware and most
likely will not utilize the various managerial practices. Perhaps the most
important findings of the study on managerial practices is that the SMEs
appears to have a very limited knowledge of the overall spectrum of managerial
practices. (Baharun, Rohaizat, et.
al, 2005) www.sbaer.uca.edu/research/icsb/2004/Papers pdf/014.pdf
Krech, O’Brien, Muller and Wass (KOMW) is a
unique collaboration of architects, structural engineers, interior designers
and construction managers established in 1985. KOMW specializes in community
and educational facilities, churches and faith-based buildings, multi- and
high-end single family homes, clinics, offices and interiors, veterinary
hospitals, production and industrial facilities, agricultural buildings and
greenhouses. Through collaboration with professional consultants, they can
provide for every requirement for new projects, adaptive reuse, alterations and
additions. Their projects have construction budgets ranging from $1,000 to $25
million
Formatting was not
the only area where KOMW saw time savings. They also saw it in initial project
set-up. DiGiorno credits this to the way the linking works, “Any documents
referenced in our Master always have a link to the related standards section
and referenced documents.” (Krech,
O, et. al, 2005).
http://www.bsdsoftlink.com/linkline/current/2005fall/fall05_komw.htm
In
A conceptual framework was postulated that Chinese CPA intervention, centred on microlevel organizational change, could have a positive impact on business performance of Singaporean Chinese SMEs. The study explored the impact of CPA intervention on business performance of SMEs. It was further postulated that CP As have a greater impact on SME performance that other external advisers. To test these propositions, a survey was undertaken of SMEs and CPAs.
The research findings indicate that SMEs that used CP As extensively out-performed those SMEs that did not use any external advisers. Amongst SMEs that used external advisers moderately to extensively, those Chinese SME that used CP As scored the best business performance growth, measured by net profit plus owner's remuneration over the ten-year period 1987 to 1997. Thus CPA interventions are associated with higher performing Chinese SMEs and in addition outperform other advisers. The outcome has important implications for professional advisers and SME owners as to the sources and types of services they provide to their clients. (Ho, Ngiap Kum and Mula, Joseph M). http://www.sbaer.uca.edu/research/icsb/2004/Papers pdf/093.pdf
The
procedures currently used by most municipal governments in developing countries
do not lend themselves to the efficient management of small contracts for
works, such as municipal/road maintenance contracts. Those procedures were not
originally intended to apply to small works, which in the past were usually
performed by direct labor (force account teams). The procedures regarding the
procurement of works and management of works contracts were generally based on
the industrial countries' regulations governing the management of large
contracts for new construction work. The use of such inappropriate procedures
in the case of small works executed by small and medium-sized enterprises (SME)
can have dire consequences in terms of contract management (or administrative)
costs, completion time, and cost of the works, while also having a serious impact
on the health of the SMEs concerned.
Now, most countries have decided to entrust a large share of their road
maintenance works to their SMEs, and, more generally, to develop their national
private sector; it thus becomes imperative to reform the procurement and
contract management procedures for small works and to adapt the owners'
organization accordingly. ( Lantran, J. M., 1994, http://www.worldbank.org/html/fpd/urban/publicat/rd-ou9.htm
).