CM&E Full Notes With Problems

CONSTRUCTION
MANAGEMENT
AND
ENTREPRENEURSHIP
(15CV61)
VTU SYLLABUS
MODULE 1
Management:
Characteristics of management, functions of management, importance and purpose of planning
process, types of plans
Construction Project Formulation:

Introduction to construction management, project organization, management functions,
management styles
10 Hrs
Construction Planning and Scheduling:
Introduction, types of project plans, work breakdown structure, Grant Chart, preparation of
network diagram- event and activity based and its critical path-critical path method, concept of
activity on arrow and activity on node.
MODULE 2
Resource Management:
Basic concepts of resource management, class of labour, Wages & statutory requirement, Labour
Production rate or Productivity, Factors affecting labour output or productivity.
Construction Equipments:
Classification of construction equipment, estimation of productivity for: excavator, dozer,
10 Hrs
compactors, graders and dumpers. Estimation of ownership cost, operational and maintenance
cost of construction equipments. Selection of construction equipment and basic concept on
equipment maintenance
Materials:
Material management functions, inventory management.
MODULE 3
Construction Quality , safety and Human Values:
Construction quality process, inspection, quality control and quality assurance, cost of quality,
ISO standards. Introduction to concept of Total Quality Management
HSE:
Introduction to concepts of HSE as applicable to Construction. Importance of safety in
construction , Safety measures to be taken during Excavation , Explosives , drilling and blasting,
hot bituminous works , scaffolds / platforms / ladder , form work and equipment operation.
10 Hrs
Storage of materials. Safety through legislation, safety campaign. Insurances.
Ethics:
Morals, values and ethics, integrity, trustworthiness , work ethics, need of engineering ethics,
Professional Duties, Professional and Individual Rights, Confidential and Proprietary
Information, Conflict of Interest Confidentiality, Gifts and Bribes, Price Fixing, Whistle
Blowing.
MODULE 4
Introduction to engineering economy :
Principles of engineering economics, concept on Micro and macro analysis, problem solving
and decision-making.
Interest and time value of money:

Concept of simple and compound interest, interest formula for: single payment, equal payment 10 Hrs
and uniform gradient series. Nominal and effective interest rates, deferred annuities, capitalized
cost.
Comparison of alternatives :
Present worth, annual equivalent , capitalized and rate of return methods , Minimum Cost
analysis and break even analysis
MODULE 5
Entrepreneurship:
Evolution of the concept, functions of an entrepreneur, concepts of entrepreneurship, stages in
entrepreneurial process, different sources of finance for entrepreneur, central and state level
financial institutions.
Micro, Small & Medium Enterprises (MSME):

definition, characteristics, objectives, scope, role of MSME in economic development,
advantages of MSME, Introduction to different schemes: TECKSOK, KIADB, KSSIDC, DIC,
Single Window Agency: SISI, NSIC, SIDBI, KSFC 10 Hrs
Business Planning Process:

Business planning process, marketing plan, financial plan, project report and feasibility study,
guidelines for preparation of model project report for starting a new venture. Introduction to
international entrepreneurship opportunities , entry into international business , exporting , direct
foreign investment , venture capital
Recommended Text Books
1. P C Tripathi and P N Reddy, “Principles of Management”, Tata McGraw-Hill Education
2. Chitkara, K.K, “Construction Project Management: Planning Scheduling and Control”, Tata McGraw-Hill
Publishing Company, New Delhi.
3. Poornima M. Charantimath , “Entrepreneurship Development and Small Business Enterprise”, Dorling

Kindersley (India) Pvt. Ltd., Licensees of Pearson Education
4. Dr. U.K. Shrivastava “Construction Planning and Management”, Galgotia publications Pvt. Ltd. New Delhi.
5. Bureau of Indian standards – IS 7272 (Part-1)- 1974 : Recommendations for labour output constant for
building works :
Recommended Reference Materials
1. Robert L Peurifoy, Clifford J. Schexnayder, Aviad Shapira, Robert Schmitt, “Construction Planning,
Equipment, and Methods (Civil Engineering), McGraw-Hill Education
2. Harold Koontz, Heinz Weihrich, “Essentials of Management: An International, Innovation, and Leadership
perspective”, T.M.H. Edition, New Delhi
3. Frank Harris, Ronald McCaffer with Francis Edum-Fotwe, “ Modern Construction Management”, Wiley-
Blackwell
4. Mike Martin, Roland Schinzinger, “Ethics in Engineering”, McGraw-Hill Education
5. Chris Hendrickson and Tung Au, “Project Management for Construction - Fundamentals Concepts for
Owners, Engineers, Architects and Builders”, Prentice Hall, Pitsburgh
6. James L.Riggs , David D. Bedworth , Sabah U. Randhawa “ Engineerng Economics” 4 ed tata Mc Graw hill.
7. S.C Sharma –“Construction Equipments and its management” – Khanna publishers

CONSTRUCTION MANAGEMENT AND ENTREPRENEURSHIP [15CV61] (Module – 1)
MODULE 1: MANAGEMENT
INTRODUCTION
Management is a function of guidance and leadership, control of efforts of a group or individuals in
order to achieve goals/ objectives of an organisation. Management has gained importance in recent
days. It is possible for any country to reach a substantial level of economic development by bringing
together the 5 M’s (Men, Money, Materials, Machines and Management).
Management is generally the same process in all forms of organisations, but may vary in its
complexity with size and nature of organisation. It is a dynamic and life-giving element in every
organisation. It resolves disputes, provides leadership and adopts the organisation to its changing
environment. It plans the activities, sets individual and over all goals, engage right and suitable
people, provide necessary training to carry out the work more effectively and efficiently, leads,
monitors, controls and helps in overall functioning of any organisation.
Definitions of management:
Henri Fayol – “Management is conduct of affairs of business, moving towards its objective through a
continuous process of improvement and optimization of resources”.
Koontz – “Management is the process of designing and maintaining an environment in which
individuals, working together in groups, efficiently accomplish selected aims”.
Follett – “Management is the art of getting things done through people”.
ILO – “Management is the complex of continuously coordinated activity by means of which any
undertaking administration/public or private service conducts its business”.
CHARACTERISTICS OF MANAGEMENT:
 It should be stable
 It should be applicable to all kinds of organisations
 It should be transparent
 Its approaches are to be clear and goal oriented
 It should be simple yet effective
 It should be responsive to many external elements like economic, technological, social,
political and ethical factors that affect the areas of operation
 It should have well defined goals and effective means to accomplish the goals
 It should have good planning, organising, staffing, directing and controlling functions
 It should provide conductive atmosphere of work
FUNCTIONS OF MANAGEMENT
There are five essential and well-accepted functions of management. They are
 Planning
 Organising
K M CHAITANYA, DEPT OF CTM, AIT 1

 Staffing
 Directing (Leading)
 Controlling
PLANNING – Planning is an executive function that is referred to as decision making. It involves
missions and objectives and the actions to achieve them. This requires decision making i.e. choosing
future courses of action from available alternatives. This involves the following,
 Setting short and long term goals for organisation
 Selecting objectives, strategies and policies for accomplishing the planned goals
 Deciding in advance what to do, how to do, who has to do, when to do and where to do
 Planning bridges the gap from where we are now to where we want to be in future
ORGANISING – Organising is a part of management that involves in establishing as intentional
structure of roles for people to fill in an organisation. To organise a business well, it is required to
provide all the useful things for its proper functioning. They are raw materials, tools, capital and
personnel. The purpose of an organisation structure is to help in creating an environment for human
performance. This involves in
 Determination of activities required to achieve goals
 Grouping these activities into departments
 Assigning such groups of activities to managers
 Forming delegation of authority
 Making provisions for coordination of activities
STAFFING – Staffing is considered as an important function which makes provision for man-power to
fill different positions. It involves in building the human organisation by filling and keep filling the
staff. This is done by identifying work-force requirements, taking inventory of people available,
recruiting new staff, selecting, placing, promoting, apprising, planning their career, training the staff
to accomplish their tasks effectively and efficiently. This involves in
 Finding the right person for right job
 Selecting the personnel
 Placement, training and developing new skills required for present and future jobs
 Creating new positions
 Apprising the staff and planning their growth and promotions etc.
DIRECTING – After planning, organising and staffing, the next important function of management is
directing or leading the people towards the defined objectives. Directing involves three sub-functions
namely communication, leadership and motivation. Communication is the process of passing the
information and understanding from one person to another. Leadership is the process by which a
manager guides and influences the work of his subordinates. Motivation means arousing the desire
in the minds of employees of an organisation to perform their best. If properly motivated, the
employees will put their best efforts with dedication, loyalty and carry out the assigned task
effectively. There are two types of motivations – financial and non-financial. Financial motivations
are in the form of salary, bonus, profit sharing, rewards etc. the common non-financial motivations
are job security, promotions, recognition, praise, felicitation etc.

CONTROLLING – Controlling is measuring and correcting of activities of subordinates to make sure

that the work is going on as per the plans. It measures the performance against goals and plans,
shows where short falls or deviations exist and takes necessary corrective actions to achieve the
goals. Controlling generally relates to the measurement of achievement. This involves three elements
 Establishing standards of performance
 Measuring performance and comparing with established standards
 Taking necessary corrective action to meet the set standards
IMPORTANCE OF PLANNING
Without planning, business decisions would become difficult. Planning is the beginning of all other
functions of management. Planning is important because,
 It overcomes uncertainty and change and minimizes risk
 It facilitates effective control
 It focuses attention and concentration only on the objectives of enterprise
 It makes economic operation and leads to success
 It forms the bridge between the present and the future
o Uncertainty and minimize risk – In the today’s complex organisations, decision making cannot
be relied only upon intuition, planning plays a vital role in decision making in such complex
situations. Planning provides logical facts and procedure to managers for making decisions. This
logical decision-making based on plans to organisation minimizes uncertainty and risk. In a
developing country like India, with rapidly changing social and economic conditions, planning
helps the managers to cope up with uncertainty and risk.
o Effective Control – Planning sets goals, targets and means to accomplish these goals. These goals
and plans become standards are benchmark against which performance can be measured. Thus,
good plans help effective control on the activities.
o Focuses attention and concentration on the objectives of the enterprise – Planning helps the
manager to focus their attention on the goals and activities of organisation. This makes the entire
organisation to walk towards the goals and create coordination in accomplishing the goals.
o Economic operation and leads to success – Mere planning does not ensure success, but planning
leads to success. This is because if the work is planned in advance, there will be no confusions
arising and things will happen as per plan and achieve goals. This results in economical operation
and reduces uncoated expenditure.
o Bridge between present and future – Plans bridge the gap between present and future. There is
a vast gap between what we are today and what we want to be in future. A proper and systematic
plan forms the bridge between these two. Without plans, it is very difficult to accomplish goals.
Hence planning is very important for success of any organisation.
PURPOSE OF PLANNING
 To select from many available alternatives so as to achieve the objectives of the enterprise,
economically, effectively and efficiently

 To direct all other functions of management

 To set up the goals of an enterprise in perspective, within the environment
 To help planned goals of an enterprise to break-up into more easily handlable additive-
segmented goals
 To form the basis of the budget
 To forecast the future to avoid uncertainty and change
 To provide effective control
 To search for alternatives and adopt the best way of accomplishing the work
 To focus the vision on the objectives and goals
TYPES OF PLANS
Based on the nature of planning, the planning is classified as
 Strategic Planning – These plans are done at top level management and are generally long
term plans
 Tactical Planning – These plans are done at lower level management and are generally short
term in nature
Based on their use, plans are classified as,
 Single use plans – These are developed to achieve a specific end. After reaching that target,
plan becomes useless
 Standing plans – These are developed for situations that often repeat. These plans can be
used again and again
Standing Plans – standing plans consists of policies, procedures, rules and methods of any
organisation
 POLICIES – Policy is defined as, “verbal, written or implied overall guide, setting up boundaries
that supply the general limits and direction in which managerial action will be taken”. Thus, a
policy is a general guideline for decision-making. They deal with “how to do” the work. They
only provide a framework within which the decisions must be made by the management in
different areas of organisation. There are several policies in different functions of any
organisation like personal policy, training policy, recruitment policy, marketing policy etc.
 PROCEDURES – Procedures are the detailed guidelines that are used to carry out the policies.
A procedure provides a detailed set of instructions for performing a sequence of operations
involved in doing a certain piece of work. Procedures are to be followed every time when that
activity is performed. Procedures may also exist for conducting meetings of board of
directors, shareholders, issuing raw materials from stores, packaging of finished goods,
inspection etc.
 RULES – Rules are detailed and recorded instructions that a specific action must or must not
be done under the given instructions. Reporting time to office, lunchtime, availing of leaves
etc. are some of the examples that follow rules.
 METHODS – Method is a prescribed way in which one-step of a procedure is to be carried out.
Thus, a method is a part of procedure. It helps in increasing the effectiveness of a procedure.

Difference between Policy and Procedure

Sl No POLICY PROCEDURE
1 General guidelines of the organisation General guidelines at the action level
2 Top level activity Departmental activity
3 It fulfils the objectives of an organisation It guides the way to implement the policies
4 They are often made without any study or They are often made after thorough study
analysis and analysis of work
Difference between Strategic and Tactical Planning

Sl No STRATEGIC PLANNING TACTICAL PLANNING
1 It is long term It is short term
2 Done at top management Done at lower levels of management
3 It consists of major goals and policies of an It consists of use of facilities and resources
organisation and resources and facilities to
accomplish the goals
4 It is less detailed, focuses only on long term
It is more detailed since it caters to day to
goals day operations and activities of the
organisation
5 It is based on long term goals and is more It is based on performance and is less
uncertain uncertain

CONSTRUCTION PROJECT FORMULATION
INTRODUCTION TO CONSTRUCTION MANAGEMENT

According to Project management Institute, USA a “Project” is defined as, “Time limited, goal
directed, major understanding requiring the commitment of varied skills and resources.”
A project can also be defined as, “combination of human and non-human resources pooled together
in a temporary organisation to achieve a specified purpose or a set of activities which can achieve
that purpose to distinguish one project from another.”
For the completion of a project, two basic things are required – material resources and man-power
resources. Many countries rich in material resources are exceedingly poor in terms of level of
production. While some countries which have limited natural resources have achieved higher level
of productivity mainly because of talents, skills, experience and know-how of their people.
Availability, quality and use of human resources is a single determinant factor in accomplishing
project objectives. Technology deals with material things, management deals with both materials as
well as humans. Management increases the productivity through technological innovation taking into
account human factors involved in these advances.
There are many factors that determine the outcome of a project. But the six main parameters that
can sufficiently define a construction project are size, complexity, quality, productivity, completion
time and cost.
 Size denotes the number of tasks to be executed in a project and each task is measured in
terms of quantities of work involved.
 Complexity is a measure of variety in the nature of tasks to be executed.
 Quality to be achieved in accomplishing tasks is stated in terms of standard specifications.
 Productivity measures the ratio of planned effort to produce a unit quantity of work divided
by the actual effort employed to achieve this unit of work.
 Completion time depends upon the speed with which the project is to be executed.
 Cost is the expenditure that the client has agreed to commit for creating the desired
construction facility.
Construction Project Management is a highly specialised job to achieve the above objectives. It
involves the following three phases,
 Project Planning
 Project Scheduling
 Project Controlling
Out of the above three phases of construction project management, the first two phases are
accomplished before the actual project starts. The third phase is operative during the execution of
the project and its aim is to recognise the difficulties during the execution and to apply measures to
deal with these difficulties.

CONSTRUCTION PROJECT LIFE CYCLE

A life cycle of a construction project can be divided into 5 phases
 Conception phase
 Definition phase
 Planning and organisation phase
 Implementation phase
 Project cleanup phase
o CONCEPTION PHASE – Here the project idea germinates. Ideas may be put to him by his well
wishers. Ideas need to be put in black and white. Ideas may undergo some changes as the project
progresses since all pertinent data are not available.
o DEFINITION PHASE – Whatever the idea put forth in the conception phase have to be further
analysed regarding the cost of the project and the benefits that will occur. Documents to be
produced describing the project should have sufficient details. Initial surveys to be conducted and
cost estimates are to be prepared. Feasibility have to be carried out so that the project is
economically viable. Ones the project become acceptable, then the sources of funding for the
project have to be found out.
o PLANNING AND ORGANISING PHASE – It starts after definition phase but can also start after the
conception phase. It overlaps with the definition and implementation phase. It consists of
conducting necessary field investigation and surveys. Preparing the design and drawings for
various elements of the project. Final estimate is then prepared. Land acquisition is the ticklish
problem in many projects. Necessary efforts are to be initiated so that the required area of land
is obtained without much trouble. Appropriate designs are to be finalised during this stage itself.
Any changes made at later stage will effect the economy of the project.
o IMPLEMENTATION PHASE – In this phase, something starts growing in the field. It also involves
preparation of specification for equipment and machinery, ordering of equipment, construction
contractor, issue of construction drawing, equipment and machinery erection etc. about 80-85%
of the work is done during this phase. Sometimes, variations in the site conditions, suitable
changes in the design may be necessary. It is the implementation phase of the project that calls
for the maximum coordination between the various agencies concerned with the
implementation of the project. Time loss during definition phase could be compensated during
this phase.
o PROJECT CLEANUP PHASE – Drawings, documents, operation and maintenance manual is handed
over to the customer. Project account is closed, outstanding payment is made and dues are
collected. First to go is the design engineer and their place is taken by the customer relation
engineer who may be for the production or maintenance. Some projects can be put into use when
certain parts of it are completed.
PROJECT ORGANISATION
Plans and specifications of any construction are to be finally converted into physical structures and
facilities which involves grouping of activities necessary to attain objectives, the assignment of each
grouping to a manager with authority necessary to supervise it, its provision for coordination
horizontally and vertically in the enterprise structure . An Organisation or Organisation Structure is

the system or process which helps in achieving the above said goals. Organisation helps the manager
to relate the tasks to the people and to other agencies in order to achieve an economical and timely
completion of the project. There are two types of organisations – Formal Organisation and Informal
Organisation.
PURPOSE OF AN ORGANISATION
The basic of having organisation is to formulate a frame or structure of an enterprise with a view to
fulfil the enterprise tasks. The purpose includes,
 Establishes the pattern of relationship by giving duties and responsibilities to an individual or
group.
 Demarcates the authority, responsibility and duties of each individual or group.
 It tells each manager where his accountability lies and who are in his sphere of command.
 Provides adequate communication.
 Coordinates or integrates and controls the activities of individuals or groups to achieve
common objectives or objectives of the enterprise.
GENERAL PRINCIPLES FOR FORMING AN ORGANISATIONAL SYSTEM

 OBJECTIVES – The objectives of the enterprise should be clearly defined. Then every part of
the organisation should be geared to the achievement of these objectives.
 SPECIALISATION – The activities of the enterprise should be divided according to functions
and assigned to persons according to their specialisation.
 SPAN OF CONTROL – It is the number of persons that can be supervised effectively by one
boss. Span of control should be minimum as far as possible.
 EXCEPTION – Only exceptionally complex problems should be referred to the executives at
the higher level since they have limited time and routine matters should be delt with by the
lower levels.
 SCALAR PRINCIPLE – There should be a clear line of authority form the top to bottom levels
of management. It makes understanding of authority relationship within an organisation
easier.
 UNITY OF COMMAND – Every individual in an organisation should be clear as to whom he has
to report and from whom he has to take orders. Each subordinate should be made reportable
to only one superior otherwise it will create confusion, delay and disorder in the organisation.
 DELEGATION OF AUTHORITY – Whenever any one is expected to shoulder the responsibility
of completing a particular job, he must be given sufficient authority to achieve the
responsibility.
 RESPONSIBILITY – The superior should be responsible for the acts of his subordinates.
 AUTHORITY – It is a tool by which a manager accomplishes the desired objectives, which
should be clearly defined.
 EFFICIENCY – The organisation structure should help enterprise to function efficiently to
accomplish the objectives at lower costs.

 SIMPLICITY – The organisation structure should be simple and the levels should be as
minimum as possible.
 FLEXIBILITY – It should be flexible, adaptable to changing circumstances, permit expansion,
replacement without dislocation and disruption of the basic design.
 BALANCE – There should be a reasonable balance in the size of various departments, between
centralisation and de-centralisation, between the principle of span of control and short chain
of command and among all types of factors such as human, technical and financial.
 UNITY OF DIRECTION – There should be one objective and one plan for a group of activities
having same objectives. It facilitates unification and coordination of activities at various levels.
 PERSONAL ABILITY – There is a need for proper selection, placement and training of staff as
the organisation is constituted by people.
TYPES OF ORGANISATION STRUCTURE

1. LINE ORGANISATION
This is the oldest and simplest form of organisation. It is also called as military organisation. There is
a clear line of authority and responsibility between the superiors and subordinates. Line Organisation
is practiced in many private construction programmes and in government construction projects.
Advantages
 Discipline among the employees is enhanced
 It is simple, easy to understand and there is a clear line of authority
 Facilitates quick decision making and responsibility for any mistake can be fixed easily
Limitations
 Communication from lower to top level management is handicapped
 There is too much concentration of authority at the top levels leading to partiality of
favouritism
 Innovation and creativity are hampered

2. FUNCTIONAL ORGANISATION
In this type, whole work is divided in such a way that each person has to perform a minimum number
of functions and is responsible for those functions. All similar and related works are grouped together
under one person. This type of organisation permits tightest discipline and control of any of the
organisational concept.
Advantages
 Entire work is divided on the basis of functional specialisation and hence the efficiency will be
increased
 Mental work is separated from manual work
 The work will be completed with better quality due to the functional specialist
Limitations
 There is no clear cut line of authority and each subordinate is accountable to a number of
specialist or supervisor. This leads to the confusion among the subordinates
 Coordination becomes more difficult

3. LINE AND STAFF ORGANISATION

It is a combination of line and functional organisation. The functional specialists with their knowledge
and experience carry out the staff responsibility, while the line authority maintains discipline and
stability in the organisation.
Advantages
 Good combination of specialist service with project construction team
 The project will be executed with better quality
 The line personnel can devote their entire time to achieve their target of the project
 The staff personnel carryout all the specialised work due to their skills and experience
Limitations
 Possibilities of conflicts between the line and functional staff
 Overhead costs will increase due to hiring the services of the specialist staff personnel

4. MATRIX ORGANISATION
Here the entire organisation is divided into several departments. Each department is assigned with a
specific task. Each department with the coordination of other department can effectively use the
available resource. It is defined as, “Any organisation that employees a multiple command structure
but also related support mechanisms and an associated organisational culture and behaviour
pattern”. This type of organisation is best suited where large number of small projects are to be
managed. For the matrix organisation to function effectively, the following conditions should prevail,
 Scalar chain of command is not followed i.e. a project manager will give reports to several
superiors.
 The physical, financial and human resources are to be shared by people of different projects
in a cooperative way.
 Sharing the resources may lead to conflicts if not understood each other properly.
Advantages
 It combines the advantages of functional and line organisation.
 It ensures the achievement of objectives with technical specialisation.
 It ensures effective utilisation of available resources.
 It adopts itself easily to external changes.
 It is highly flexible.
 Motivation can be effectively applied.
 Makes room for training and development of people.
Limitations
 It leads to confusions since it does not follow scalar chain of command.
 Work may be delayed since too many supervisors control an activity.
 Sometimes resources may not be made available owing to other priority projects.
 May lead to conflicts owing to lack of unity of command in the organisation.

PROJECT MANAGEMENT FUNCTIONS

The following are the project management functions
 Planning
 Organising
 Procuring
 Directing or Leading
 Controlling
o PLANNING – It involves deciding in advance what is to be done, how and in what order it is to be
done in order to achieve the objective. Planning aims at deciding upon the future course of action.
Schedule depicts when the planned activities are to be carried. It puts the plan on the calendar
date scale. Planning and scheduling involves the following,
 Collecting and analysing the information
 Developing alternative course of action in specified constraints
 Comparing alternatives in terms of objectives, feasibility and consequences
 Selecting and scheduling the optimum course of action
 Establishing policies, procedures, methods, schedules, programmes, systems, standards
and budgets for accomplishing projects objectives
o ORGANISING – It is the process of establishing a structural relationship among functions of
people so as to formulate an effective mechanism for streamlining the achievement of assigned
objective. Organising involves the following tasks,
 Dividing the work into component activities
 Designing job structure
 Defining performance targets and responsibilities
 Allocating resources
 Delegating authorities commensurate with responsibility
 Establishing structural relationship to secure coordination
o PROCURING – It implies in managing the position created by the organisation structure and
providing them the right quality resources at right time. The connected project management task
include the following,
 Preparing resource procuring schedule
 Developing specification for required resource
 Developing appropriate source of procurement
 Budgeting resources and arranging approvals and purchases
 Preventing wastage during resource holding at site
 Supplying on time required quality and quantity of resource to project construction site
o DIRECTING or LEADING – It involves influencing the people so as to enable them to contribute to
organisational goal efficiently and effectively. Directing involves the following tasks,
 Providing effective leadership
 Motivating participants behaviour
 Communicating instructions and orders
 Providing a suitable climate for subordinate development

o CONTROLLING – It involves monitoring of the performance and applying corrective measures in

case of deviation from the plan. The process of control can be subdivided into the following
stages,
 Specifying the factors to be controlled
 Starting the methods of measuring control factors
 Evaluating systems for generating performance data
 Monitoring data received and formulating corrective options
 Applying corrective measures to put a plan on the schedule path
 Re-planning when necessary
MANAGEMENT STYLES
1. AUTOCRATIC
In this style, the manager tells the employees what to do. If the employees fail to fall in line, they face
consequences. Employees are motivated mostly through fear of discipline. The company has specific,
clear policies that employees must follow. Management isn’t interested in hearing feedback from
employees.
There are some clear downsides to this style. Employees are entirely dependent on management to
do their jobs, meaning that new and innovative ideas are unlikely to emerge in this system. There’s
also no room for employee buy-in or value of collaboration. A lack of critical feedback means that the
company will continue to use management’s worst ideas.
However, there are some benefits, especially in specific situations. In the autocratic style,
management sets clear expectations for what employees need to do. Each employee has a specific
role in the strict hierarchy. Decision-making is also streamlined. This style may be useful in crises
when fast, decisive action is necessary. However, in the long term, this top-down management style
is not going to work and it should be used rarely.
2. CONSULTATIVE
This differs from the autocratic style in that management seeks employee feedback before making
decisions. This leads to a better relationship between management and employees, meaning less
turnover and greater employee loyalty. Management takes employee concerns about the workplace
seriously. This may include an open-door policy, where employees can drop in on managers any time
to talk about what’s working and what isn’t.
However, this is still a top-down system in that management retains the sole power of decision-
making. Employees are consulted, but ultimately have little power in the process. It is slightly less
efficient than the autocratic style as a greater number of people are involved in making decisions. In
most non-emergency situations, consulting with employees is the minimum that managers should
do.
3. PERSUASIVE
In this model, managers still retain control of making decisions. However, they make every attempt
to help employees see why management’s decisions are the best for the company. This can create
employee buy-in when management successfully explains their plans for the company. This is helpful

when an independent expert comes in to analyse a company’s operations. Management may need
to sell employees on why the expert’s criticisms are valid.
Yet this is still a one-way communication process. That means employees may feel alienated. Rather
than listening to employee feedback, management is more concerned with proving that they are
right. Like the autocratic style, leaders should use this one sparingly.
4. DEMOCRATIC
Just like a political democracy, decisions are made by a majority with a real stake for employees. For
big, long-term decisions that affect the entire company, this can be the most effective method. It is
particularly well suited for gaining employee buy-in, meaning that employees will work hard to
implement the final decision. This is a collaborative process in which employees and management
work together to create a vision. A democratic style includes open forums and effective
communication among various levels of the organization.
But once again, just like political democracy, managerial democracy is in some ways less efficient.
Decision-making involves consultation of multiple parties and often includes debate. This managerial
style is associated with a more flat organizational model, meaning that employee roles may not be
as clear. However, many successful managers believe that this style is a good default, as it creates
strong bonds with employees, possesses meritocratic values, and allows employees to be
independent.
5. CHAOTIC
This is when managers cede all control to employees without putting specific structures in place for
decision-making. This is sometimes associated with truly flat organizations. This can work in specific
situations, like when a team of capable employees is tackling a project. However, role confusion and
inefficiency in decision-making are clear downsides.
6. LAISSEZ-FAIRE
In this style, the manager is more of a mentor than a leader. Employees make decisions about how
to go forward and may seek the manager’s guidance when needed. This can be good in specific
situations where employees need space to be creative. Employees are independent of managers,
although they may not have much direction. This style has overlap with the so-called “management
by walking around,” in which managers monitor what is happening without becoming too involved.

CONSTRUCTION PLANNING AND SCHEDULING

INTRODUCTION
Project Planning
Project planning involves the following
 Material coordination
 Labour coordination
 Finance coordination
 Risk analysis
 Quality assurance
Objectives of planning
 Planning helps in proper design
 Proper selection of equipment and machines
 Constant flow of funds
 Employment of trained and experienced staff
Steps in planning
 Identification of problem/opportunity. This is necessary to formulate practical and realistic
goals.
 Securing and analysing necessary information
 The analysis of the information will lead to formulation of certain processes and course of
action.
 Ascertaining alternative course of action
 Selecting an efficient plan
Scheduling
Scheduling is defined as putting the project on a calendar basis. A project network shows the
sequence of interdependence of activities and their time duration. However, it needs to be scheduled
to determine the commencement and termination dates of each activity, using optimum resources.
Advantages of scheduling
 Clear picture regarding the resources is obtained
 Arrangement and rearrangement of activities can be done prior to the commencement of
work
 Monitoring of work is streamlined
 Total duration of the project is known
 It is suitable for all type of project

TYPES OF PROJECT PLANS

Planning the entire project from its inception to completion requires a vast coverage, varied skills
and different types of plans. The nature of plans encountered in a typical construction project are,
Inception stage – project feasibility plan
Engineering stage – project preliminary plan
Implementation stage – project construction plan
o PROJECT FEASIBILITY PLAN – Planning by the client begins as soon as he gets the idea about
developing a facility to fulfil certain motives. His early thought process conceptualize the cost,
time and benefit implications of the project. Only when he is convinced about the soundness of
his idea does he decide to go ahead with the feasibility studies.
The feasibility study team examines the need of the client and ways to fulfil them. It defines the
overall scope of work and breaks it down into various task groups. It develops an outline plan of work
and assesses the time and costs of accomplishing the project. This outline plan, developed by the
feasibility team during the inception stage, forms the basis for identifying project objectives and
developing the project plan.
o PROJECT PRELIMINARY PLAN – Acceptance of the feasibility studies marks the commencement
of the preliminary plan making process. Its main aim is to provide direction to the client managers
and staff employed during the development phase of the project. The project preliminary plan
forms the basis for developing the project construction plan. The preliminary plan may include
the following,
 A project time schedule and the skeleton network to highlight the work dependencies,
project milestones and the expected project completion time.
 The project designs and drawings preparation schedule.
 A breakdown of project work into contracts, along with a schedule of contracting
activities, including the tender preparation period, tender finalisation period and the
contract works commencement and completion dates.
 A resources preliminary forecast indicating the phased requirement of men, important
materials, plant and machinery.
 Resource procurement system.
 Project organisation and staffing pattern.
 Preliminary forecast of funds requirement.
o PROJECT CONSTRUCTION PLAN – The client entrusts the construction of the project facilities to
the project management team headed by the project manager or the resident engineer. This
team may be from the clients own construction agency or from a client appointed construction
management consultant firm or from a suitably organised combination of these. The planning
chief, who is a member of the project management team, is entrusted with a task of developing
the project construction plan. This plan includes the contracted works plan and the
commissioning plan, as applicable. The work programmes are derived from the targets set out in
the project plan.
The project construction plan as well as the contracted works plan further include the following plans,

 Time plan – It depicts the schedule of the project activities for completion of the project
within the specified time.
 Resources plan – It forecasts the required input resources of men, material, machinery
and money for achieving the project completion time target and cost objectives.
 Plan for controlling project – It encompasses the design of control system, monitoring
system, codification system and the computerised information system.
WORK BREAKDOWN STRUCTURE

Work breakdown structure involves breaking down of the project work into manageable parts (sub-
projects, tasks, work packages and activities) arranged in a hierarchical order until the desired level
is reached. The work breakdown levels ae broadly cauterised into five levels. They are,
 Sub-project level
 Task level
 Work-package level
 Activity level
 Operations level
o SUB-PROJECT LEVEL – They are derived by dividing the project work into independent large
volume mini-projects or task groups.
o TASKS LEVEL – The project or sub project work can be split up into various tasks. A task is an
identifiable and deliverable major work. It is an entity in itself and can be performed without
much interference from other tasks. Each task is assigned time and cost objectives and is provided
with planned resources for accomplishing the task objectives. The task execution is entrusted to
a task responsibility unit headed by a manager or a senior engineer.
o WORK-PACKAGES LEVEL – A project task can be further subdivided into one or more work
packages. Each work package contains a sizeable, identifiable, measurable, costable and
controllable package of work. In a project master plan or the contracted works control plan, each
work package is assigned its performance objectives. These are generally stated in terms of its
completion period, standard cost, resource productivity standards and the standard sale price.
The measure of performance thus gets closely linked with the execution of its work packages.
Work packages form a common base for linking the key functions in project management. The
work package concept leads to the simple management theory of managing, designing,
estimating, planning, organising, directing, communicating and controlling, using these work
packages as the base lines.
o ACTIVITY LEVEL – A work package can further be broken down into various identifiable jobs,
operations and processes, which consume time and possibly, other resources and are necessary
for its completion. Each one of this is called an activity. The breaking down of a work package into
its constituent activities requires a study of the methodology of execution of the work package.
This methodology, generally known by the term ‘method statement’, is evolved by the concerned

planning engineer using his construction experience and through his discussions with the
respective project engineers.
o OPERATIONS LEVEL – An activity comprises one or more operations. Each operation contains a
part of the work content of the activity. It generally has a particular type or a fixed group of
resources associated with it. It is performed during the scheduled time duration of the activity.
Some operations may start with the commencement of the activity, while others may take place
during its time duration. Operations are not considered during the network modelling and
analysis stage except that the sum of the costs of operations equals the activity cost. They form
the basis for allocation and scheduling of resources of each activity.


Project management tools

 Gantt chart
 Network diagrams
 Histograms
 CPM – Critical Path Method
 PERT – Program Evaluation and Review Technique
GANTT CHART
Henery Gantt introduced Gantt chat or bar chart around 1900 AD. It is the oldest project
management tool. It consists of two coordinate axes, horizontal axis representing the time elapsed
and vertical axis representing the jobs or activities to be performed. Each bar represent one specific
job or activity of the project. The beginning and end of each bar represent the time of start and time
of finish of that activity. The length of bar therefore represents the time required for the completion
of that job or activity. Each bar can be represented either by a set of two lines running parallel to
each other or by a thick solid line.
Development of bar chart

The following is the important stages in developing a bar chart
1. BREAKDOWN: The project is broken down into various activities, jobs, or operations, each
representing manageable unit for planning and control.
2. DECIDE: The method to be employed in execution of the project, as well as for each activity
or operation or task is decided. In addition, the sequence in which the activities are to be
completed is decided.
3. ASSIGN: Duration of time for the completion of each activity is assigned. Once the activities
are separated and choice of method is made, it is possible to estimate the time required for
the completion of each activity.
4. REPRESENT: The above information is represented in a bar chart indicating the relative
positions of each activity.
Advantages of Gantt Chart

 It is to represent the Project schedules and Activities
 Easy to represent Tasks, Sub-tasks, Milestones and Projects Visually on a Graph
 Clear visibility of Dates and Time Frames
 It helps to see the Plans by Day, Week, Month, Quarter and Year
 It helps in effective time management
 Easy to check the project status
Limitations of Gantt Chart

 Require more efforts for Creating and Managing the Chart

 Updating a Chart is Very Time Consuming

 All Tasks are not visible in a single view of a Gantt, need to scroll and Click additional buttons to
view remaining items
 Stacks represents only the time and not the hours of the work
 Not easy to re align the tasks from one section to another
 Not easy to calculate the aggregates
PREPARATION OF NETWORK DIAGRAM

Terms and definitions
ACTIVITY – Any process which consumes time or resources and has a definite beginning and end is
called an activity. It is denoted by an arrow.
Description
Duration
EVENT – The beginning and completion of any activity is termed as an event. It indicates a particular
instant of time at which some specific milestone has been achieved. It does not consume any
resource or time by itself.
Types of events
TAIL EVENT – An event, which marks the beginning of an activity, is called the tail event
HEAD EVENT - An event, which marks the completion of an activity, is called the head event
DUAL ROLE EVENT – An event, which acts as an tail event for some activity and head event for some
other activity
BURST and MERGE EVENT – The nodes to which a number of activities converge are called merge
event. The node from which a number of activities emerge are called as burst events.
3
1 2 4 6
5
Event 1 is a tail event of activity A, Event 2 is a head event of activity A, Events 2,3,4,5 are the dual
role events. Event 2 is a burst event and Event 6 is a merge event.
Interrelationship of events
SUCCESSOR EVENT – An event that follows a particular event in the sequence of their completion is
called a successor event to that event. In the above figure, event 2 is the successor event to event 1.
Events 3,4,5 are the successor events to event 2.

PREDECESSOR EVENT – An event which occurs before the particular event in the sequence of
completion are called predecessor event. In the above figure, event 1 is the predecessor event to
event 1. Event 2 is predecessor to event 3,4,5. Event 3,4,5 are predecessor to event 6.
DUMMY – A dummy is a type of operation in a network which neither requires any time or resource,
but is merely a device to identify a dependence among operations. A dummy is also represented by
an arrow, but since it is not an activity, it is represented by dashed arrow.
Uses of dummies
 Grammatical purpose – no two activities should have common initial and final node.
 Logical purpose – any activity cannot have dual identity. It should have unique identity.
Rules for drawing network

 Initial node has only outgoing arrow. There must be only single initial node in a network.
 An event cannot occur until all activities leading to it are completed.
 No activity can start until its tail event has occurred
 Representation of the network should be such that every activity is completed to reach the
end objective.
 All constraints and interdependencies should be shown properly on the network by use of
appropriate dummies.
 It is the usual practice to show the time flow from left to right.
 An event occurring twice (network looping) is not permitted.

Numbering the event (Fulkerson Rule)

 There is a single initial event in a network diagram. The initial event will have arrows coming
out of it. Number this initial event as 1.
 Neglect all arrows emerging out of the initial event numbered 1. Doing so will apparently
provide one or more new initial events.
 Number these apparently produced new initial events as 2,3,4 etc.
 Again neglect all emerging arrows from these from these numbered events, this will create
few more initial events.
 Follow step 3
 Continue this operation until the last event.
CRITICAL PATH METHOD (CPM)

CPM networks are usually used for repetitive type of project where fairly accurate estimates of time
can be made for activities of the project. The activities of these projects are characteristically subject
to relatively small amount of variation. CPM is found to be of much use in the construction industry
with application in the construction of massive structures like dams, bridges, tunnels, high rise
buildings etc. It is not suitable for research and development type of projects.
Activities time
EARLY START TIME (EST) – Earliest time by which an activity can start.
EST = TEi (Earliest event time of tail event)
EARLY FINISH TIME (EFT) – Earliest time by which an activity can be completed.
EFT = EST + tEij = TEi + tEij (where tEij is the duration of the activity)
LATEST START TIME (LST) – Latest time by which an activity can start without delaying the completion
of the project.
LST = LFT + tEij
LATEST FINISH TIME (LFT) - Latest time by which an activity can be completed without delaying the
completion of the project.
LFT = TLj
FLOATS – Floats denotes the flexibility range within which the activity start time and finish time may
fluctuate without effecting the total duration of the project. It is associated with the activity time.
Types of floats
TOTAL FLOAT (FT) – Time span by which starting or finishing of an activity can be delayed without
affecting the overall completion time of the project.
FT = LST – EST

FREE FLOAT (FF) – Duration by which an activity can be delayed without delaying any other
succeeding activity.
FF = FT – Sj (where Sj is the Head Event Slack)
Sj = TLj – TEj
INDEPENDENT FLOAT (FID) – It is the excess time available if the preceding activity ends as late as
possible and the succeeding activity starts as early as possible.
FID = FF – Si (where Si is the Tail Event Slack)
Si = TLi – TEi
INTERFERING FLOAT (FIT) – It is the difference between Total Float and Free Float.
FIT = FT – FF = FT – (FT – Sj)
Criticality and critical activity

Sub-critical activity – FT is Positive (Normal Attention)
Critical Activity – FT is Zero (Extra Attention)
Super-critical Activity – FT is Negative (Special Attention)
Critical Path - Critical path is the longest path through the network and time along this path gives the
project duration. Critical path joins those activities (including dummy activities) which are critical i.e.
those activities that have total float equal to zero. The activities in the critical path controls the
project duration and form a continuous chain or path starting at the first node and ending with the
last node.
Significance of critical path

 It is the longest path in the network. However it is possible for a network to have more than
one critical path. The sum of the durations of critical activities along the critical path
determines the duration of the project.
 It is the most sensitive path. Any change in the duration of critical activities along the critical
path is bound to affect the duration of the entire project.
 By isolating the critical path, the project management can exercise ‘management by
exception’ thereby focusing its attention on the critical activities.
ACTIVITY ON NODE (AON) or PRECEDENCE NETWORK
EST ACTIVITY EFT

and
LST DURATION LFT
Here, square nodes represent activity and arrow represents the interdependencies. This technique
is also known as Method of Potential or Roy’s Method. Mr. B Roy of France developed it in 1957.

Logic of AON
 Network drawing logic is same as that of AOA.
 But main difference is that, in AOA activities are represented in arrow whereas in AON
activities are represented in nodes.
 Time duration in taken to flow from left to right.
 All the activities lying to the left of an activity precedes it and all activities lying on its right
follows it.
 Dummies are not required in AON network.

Advantages of Precedence Network

 Dummies are eliminated there by computational work involved with dummies is
considerably reduced.
 It is not obligatory for the nodes to be numbered serially which allows addition of new
activities.
 Activity numbering is simple as only one number is enough to designate an activity.
 Adopts simple notation and can be easily understood by non-specialist also.
 No arrows are required to show the logic sequence of activities.
 All activities on the left precede those on right.
COMPARISON BETWEEN PRECEDENCE NETWORK ANALYSIS AND CRITICAL PATH METHOD

1. COMMOM FEATURES
 Both separate planning and scheduling. In network based project, network planning
precedes scheduling of work and budgeting of resources.

 Both enables systematic and logical development of time programme of complex

projects with resource constraints.
 Both depict interdependence diagrammatically.
 Both help in establishing a relationship between time and cost, thus enabling
optimisation of resources.
 Both are independent of time axis and therefore do not become outdated with the
passage of time.
 Both aid in establishing key events, scheduling of work, budgeting of resources and
measuring of risks on a scientific basis.
 Both provide basis for monitoring progress and analysing effect of deviations.
 Both help in exercising management by exception.
 Both provide the common language for communication among all those connected
with management of projects thus reducing communication gaps, coordination effort
and contractual disputes.
2. MAJOR DIFFERENCES
 Comprehensive Appearance – PNA presents a better appearance than CPM.
 Ease of drawing – the logic arrow diagram of CPM is easy to draw whereas PNA takes
more time to develop.
 Realistic logic representation – PNA takes into consideration overlapping of activities
as they occur in actual execution of engineering tasks. PNA can represent four type of
logic, finish-to-start, start-to-start, start-to-finish and finish-to-finish.
 Ease of logic alteration – PNA enables easy alteration as it involves connecting
dependency lines instead of shifting of arrows and events as in the CPM network.
 Computerisation of network – PNA network can be zoomed in various sizes and levels
on computer screen according to the information needs of various levels of
management. The detailed activity networks can be easily transformed to the
summarized versions.
 Manual analysis of network – CPM is comparatively easier to analyse than PNA.
 Activity label – In PNA each activity is given a unique label number. This label can also
be used to indicate the activity resources whereas in CPM, the label of activity changes
with alteration of logic or addition of new activities.
 Time scale network schedule – It is easier to draw bar charts as well as the time scale
networks format from CPM network. Whereas it is difficult in PNA.
LIMITATIONS OF NETWORK TECHNIQUES

 Though simple and straight forward, the introduction of network analysis requires specialised
training.
 Network analysis is not very useful for planning repetitive type of work.
 Network analysis provides a means for taking decisions, but the actual decisions have to be
made by the management itself.
 Network analysis indicates only the practical course of action to be accomplished in specified
time objective.

Scanned by CamScanner
MODULE 2: RESOURCE MANAGEMENT

BASIC CONCEPTS OF RESOURCE MANAGEMENT
 RESOURCE - A resource is a necessary asset whose main role is to help carry out a certain task
or project. A resource can be a human resource, a financial resource, a product to be sold or
obtained, skills, technology, information, elements for production or time. Most projects
require many different resources in order to be completed.
 RESOURCE MANAGEMENT – Resource management is an element of project management,
which deals with resources. Careful management of resources leads to the path of project
success. However, mismanagement of resources can lead to project failure, overtime, budget
overages, and other unfortunate events.
 RESOURCE PLANNING - Every project plan have a resource plan as its component. The
resource plan contains all the aspects of the project from beginning to end that pertain to
resources required.
 RESOURCE BERAKDOWN STRUCTURE – Breaking down the resources required to complete
the project in a hierarchy similar to that of Work Breakdown Structure.
 RESOURCE ALLOCATION – It is the allocation of resources to the tasks in a fair and balanced
manner. Resources must be used to the maximum capacity for the minimum amount of cost.
 RESOURCE OVER ALLOCATION – Over allocation of a resource is when a resource has been
assigned more work than can be completed during normal work hours. Resource allocation
often leads to overtime and overspending on financial resources.
 RESOURCE LEVELLING – Levelling resources involves redistributing an imbalance of allocated
work. It assists project managers by keeping their team members from working overtime.
CLASS OF LABOR
The following is the list of building construction workers trade classification,
BUILDING TRADES
Carpentry works Masonry work RCC Steel work
Shuttering carpenter Concrete helper, Masonry work Rebar fabricator, Rebar helper
Furniture carpenter Concrete mason, Mason helper
Wood polisher Blockwork and plaster mason
carpenter helper Tiling mason, Marble mason
Painting work Electrical works Plumbing and sanitary works

Painter, Painter helper Electrician, Cable jointer Plumber, Pipe fitter
Cable layer, Electrical helper Plumber helper
Mechanical trades Drivers and operators Administration staff

Fitter, Machinist, Welder, Light vehicle drivers, Office helper, medical helper,
AC Mechanic, Sheet fabricator, Heavy vehicle drivers, Security staff, cook, Janitor,
Diesel mechanic, Equipment operators Tailor, Mass helper, Laundry
Auto electrician, man
Petrol mechanic,
Mechanic helpers, Riggers

WAGES AND STATUTORY REQUIREMENT

Wage is a monetary payment made by the employer to his employee (labor) for the work done or
services rendered. Wages are paid either in the form of time rate or piece rate on weekly, daily or in
hour basis. On the other hand, salary refers to the monthly rate of pay, irrespective of the number of
hours put in by the employee. Wages and salaries are subject to the annual increments. They differ
from employee to employee, and depend upon the nature of job, seniority, and merit.
Methods of Wage Payment:

1. Time Wage System: The wages are paid according to the time spent by the worker
irrespective of work done.
2. Piece Wage System: Wages are paid based on the output not on time. A Fixed rate is paid for
each unit produced.
3. Balance method: It is a combination of time and piece rate system. The workers has to
produce these many units (output) within the given stipulated time.
Minimum Wage – Minimum wage is the wage that is able to provide not only for bare physical needs
but also takes care of education, medical requirements, and some level of comfort of workers. The
minimum wage may be defined as, “the lowest wage necessary to maintain a worker and his family
at the minimum level of subsistence, which includes food, clothing and shelter.” When the
government fixes minimum wage in a particular trade, the main objective is not to control or
determine wages in general but to prevent the employment of workers at a wage below an amount
necessary to maintain the worker at the minimum level of subsistence. (reduce exploitation).
Minimum wage may be tied by an agreement between the management and the workers, but is
usually determined through legislation.
Living Wage – Living wage is that which workers can maintain the health and decency, a measure of
comfort and some insurance against the more important misfortune of life. Living wage is defined as
“a wage sufficient to ensure the workman food, shelter, clothing, frugal comfort, provision for evil
days etc. as regard for the skill of an artisan, if he is one". The minimum wage must be paid
irrespective of the extent of profits, the financial condition of the establishment or the availability of
workers at lower wages. The wages must be fair, i.e. sufficiently high to provide standard family with
food, shelter, clothing, medical care and education of children appropriate to the workmen. A living
wage must be fixed considering the general economic conditions of the country.
Fair Wage – A fair wage lies between the minimum wage and the living wage, which is the goal.
Wages must be paid on an industry wise and region basis having due regard to the financial capacity
of the company. A fair wage is something more than the minimum wages. The lower limit of the fair
wage must be the minimum wage and the upper limit is the capacity of the industry to pay fair wage
comparing with the average payment of similar task in other companies or occupations. It can be
fixed only by comparison with an accepted standard wage. Such a standard can be determined with
reference to those industries where labor is well organized and has been able to bargain well with
the employers.
STATUTORY REQUIREMENTS FOR LABOURS

LABOUR REGULATIVE LEGISLATION
The main objective of the regulative legislation is to regulate the relations between employees and
employers and to provide for methods and manners of settling industrial disputes. Such laws also
regulate the relationship between the workers and their trade unions, the rights and obligations of
the organisations of employers and workers as well as their mutual relationships.

 Trade Unions Act, 1926

Trade unions are primarily formed to regulate the relations between workmen and employers. Upon
registration, trade unions enjoy certain protection and privileges under the law. In addition, the Act
also provides for imposing restrictions on the conduct of any trade or business A registered trade
union is a body corporate with a perpetual entity under a common seal. From the HR manager’s point
of view, it is essential to invite registered trade unions of the unit only for collective bargaining
and also from participative forums like works committee, etc., from their nominated representative.
 Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947 primarily regulates industrial relations in India. The Act provides a
machinery and procedure for settlement of industrial disputes by negotiation, without resorting to
strikes and lockouts. The scope of the Act extends to the whole of India for every industrial
establishment carrying on any business, trade, irrespective of the number of people employed. A
tentative list of disputes, covered under this Act is reproduced below:
o The propriety or legality of standing orders
o Discharge or dismissal
o Matters pertaining to reinstatement or grant of relief for wrongful dismissal
o Matters pertaining to withdrawal of any concession or privilege
o Matters pertaining to strike or lockout
o Payment of wages, including periodicity and mode of payment
o Leave and hours of work
o Holidays
o Bonus
o Retirement benefits
o Discipline
o Non-implementation of the award, etc.
 Industrial Employment (Standing Orders) Act, 1946

This Act requires employers to clarify conditions of employment so as to enable the workmen
(employed by them) to understand the rules of conduct pertaining to working hours, holidays,
attendance, leave, termination of employment, suspension or dismissal, misconduct, etc. The Act is
applicable to industrial establishments, employing 100 or more workmen. Under this Act, employers
are required to submit a draft of standing orders to the certifying officer for certification.
LABOUR PROTECTIVE LEGISLATIONS

Under this category come those legislations whose primary purpose is to protect labour standards
and to improve the working conditions. Laws laying down the minimum labour standards in the areas
of hours of work, supply, employment of children and women, etc. in the factories, mines,
plantations, transport, shops and other establishments are included in this category.
Some of these are the following:
 Factories Act, 1948

This Act is divided into twelve chapters covering 141 sections, which again are supplemented by three
schedules. The first Act was enacted in 1881 to regulate working conditions in factories primarily for
women and children and to provide them health and safety measures. The new Act of 1948 replaced
the earlier one and through a series of amendments made from time to time, the Act is now more
comprehensive covering all areas of working conditions of labour.

 Shops and Establishments Acts

The Act, in essence, a state legislation. It seeks to regulate the working conditions of workers in the
unorganised sector, including shops and establishments which do not come under the Factories Act
Regulations.
LABOUR WAGE-RELATED LEGISLATIONS

Legislation laying down the methods and manner of wage payment as well as the minimum wages
come under this category:
 Payment of Wages Act, 1936

The Act is intended to regulate the payment of wages in a particular form at regular intervals without
any unauthorised deductions. It is applicable to the employees receiving wages below Rs.1,600 per
month. As per the Act, employers are responsible for payment of wages to the employees duly fixing
the wage periods (which in no case should exceed one month), deciding about the time of payment
as per the norms (which requires payment within seven days of the expiry of the wage period.
 Minimum Wages Act, 1948

The Act provides for minimum statutory wages for scheduled employment. The Act also stipulates
maximum daily working hours, weekly rest and overtime. The Act empowers the State Government
to fix minimum wages, failing which they cease the right to engage labour and run the industry.
 Payment of Bonus Act, 1965

The Act imposes statutory liability on employees (covered under the Act) to pay a bonus to
employees according to the prescribed formula, linking the bonus with profits or productivity.
LABOUR SOCIAL SECURITY LEGISLATIONS

They cover those legislations, which intend to provide to the workmen, social security benefits under
certain contingencies of life and work.
 Workmen’s Compensation Act, 1923

Factories and establishments which are not covered under the Employees State Insurance Act are
covered under this Act to provide relief to workmen and/or their dependents in case of accidents
arising out of and in the course of employment causing either death or disablement of workmen. The
workmen’s compensation (Amendment) Act, 2000 w.e.f. 8-12-2000 has brought all the workmen
within the limit of this Act, irrespective of their nature of employment.
 Employees PF and Miscellaneous Provisions Act, 1952

The Act provides for the compulsory contributory fund for social security of the employees and their
dependents (in the case of death). It extends to every factory, establishment employing 20 or more
persons. The Central Government, however, by notification, brings any establishment under the
purview of the Act even in cases where such establishments 19.6.1 Factories Act, 1948.
 Maternity Benefit Act, 1961

This provides maternity benefits to women employees. It sets out that a woman may avail maternity
leave with full salary before or after the birth of her child.
 Payment of Gratuity Act, 1972

This Act is also a social security measure to provide a retirement benefit to the workmen, who have
rendered long and unblemished service to the employer. Employees are entitled to receive gratuity
under the Act.

LABOUR WELFARE LEGISLATIONS

Legislation coming under this category aim at promoting the general welfare of the workers and
improving their living conditions. However, in a sense, all labour-laws can be said to be promoting
the welfare of the workers and improving their living conditions and though many of the protective
labour laws also contain chapters on labour welfare; the laws coming under this category have the
specific aim of providing for improvements in the living conditions of workers. They also carry the
term “Welfare” in their titles.
o Limestone and Dolomite Mines Labour Welfare Fund Act, 1972
o The Mica Mines Welfare Fund Act, 1946
o The Iron Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare
Fund Act, 1976
o The Cine Workers Welfare Fund Act, 1981
o Beedi Workers Welfare Fund Act, 1976
MISCELLANEOUS LABOUR LEGISLATIONS

Besides the above, there are other kinds of labour laws, which are very important. Some of these
are:
o The Contract Labour (Regulation and Abolition) Act, 1970
o Child Labour (Prohibition and Regulation) Act, 1986
o Building and other construction workers (Regulation of Employment and Conditions of
Service) Act, 1996
o Apprentices Act, 1961
o Emigration Act, 1983
o Employment Exchange (Compulsory Notification of Vacancies) Act, 1959
o Inter-State Migrant Workmen Act, 1979
o Sales Promotion Employees (Condition of Service) Act, 1976
o Working Journalists and other Newspapers Employees Act, 1955.
LABOR PRODUCTION RATE OR PRODUCTIVITY

Labor Productivity is defined as the effort in man-days or man hours needed for accomplishing a unit
quantity of work while working efficiently but allowing for normal delays and wastage.
Labor Productivity = Labor output norms X Production Efficiency Factor
Where,
Labor output norms are expressed in man-days or man-hours, category wise, required for
accomplishing the unit work.
Production Efficiency Factor is the multiplier used to convert production norms into
productivity standards expected under job conditions at the site.
The basic equation for determining the workers required for accomplishing a specific activity is given
by,
Work Quantity X Labor Productivity Standard
Workers Required =
Completion Period
Where,
Work Quantity of the activity involved is expressed in standard work units.
Completion period is taken as working days or hours planned to accomplish the task.
Factors affecting Production Efficiency

 Work Complexity – a simple, familiar work, is easier to execute than an unfamiliar, complex
one for which extra effort is needed.

 Repetition of work – the first time execution of an unfamiliar work needs extra effort and
results in low output. The skills acquired in the process when utilized over a period of time to
execute similar works improves productivity rate.
 Quality Control – stringent quality control in sensitive projects like construction of nuclear
reactors involve frequent inspection and elaborate documentation, which is time consuming.
They increase the non-productive time of workers.
 Equipment intensive tasks – equipment intensive tasks are less susceptible to productivity
changes than the labor intensive ones.
 Supervision – an efficient and effective supervisor can get a higher productivity from workers.
The accomplishment of tasks economically and on schedule mostly depends upon the
competency of the supervisor.
 Climatic and weather conditions – generally, under average weather conditions the labors
continue working at same productivity level. But, extreme weather situation and seasonal
changes affect both productivity as well as work performance.
 Labor availability – labor productivity also depends upon the employment opportunities
available in the market. If the jobs are plenty and labor is scarce, the labor productivity tends
to become less.
 Role of management – the project management has a key role to play in planning and
controlling the productivity. It is responsible for specifying the weekly target of work to be
accomplished by the workers as well as how the works are to be executed and using which
resource.

CONSTRUCTION EQUIPMENT MANAGEMENT
CLASSIFICATION OF EQUIPMENT
Based on their function, equipment’s can be classified as,
1. Earthwork Equipment
i. Earth cutting and moving equipment – Bulldozers, scrapers, front end loaders, motor
grader
ii. Excavation and lifting equipment – Backhoes, power shovels, draglines, clamshell
iii. Loading equipment – Loaders, shovels, excavators
iv. Transportation equipment – Tippers, dump trucks, scrapers, conveyors
v. Compacting equipment – Tamping foot rollers, smooth wheel rollers, pneumatic
rollers, vibratory rollers, plate compactors
2. Concreting plant and equipment
i. Production equipment – Batching plant, concrete mixers
ii. Transportation equipment – Transit mixers, concrete dumpers
iii. Placing equipment – Concrete pumps, conveyors, hoists, grouting equipment
iv. Concrete vibrating equipment – Needle vibrator, plate vibrator
3. Material hoisting equipment
i. Hoists – Fixed, mobile, fork lifts
ii. Mobile cranes – Crawler-mounted, self propelled rubber tyred, truck mounted
iii. Tower crane – Stationary, travelling type
4. Special purpose heavy construction plant and equipment
i. Aggregate production equipment – Crushing plants, rock blasting equipment,
screening plants
ii. Concrete paving equipment – Concrete paver finisher
iii. Pile driving equipment – Pile driving hammer
iv. Asphalt mix production and placement equipment – Asphalt plants, asphalt pavers
v. Tunneling equipment – Drill jumbos, muck hauling equipment, rock bolters, tunnel
boring machines.
5. Support and utility services equipment
i. Pumping and dewatering equipment
ii. Pipe laying equipment
iii. Generators
iv. Welding equipment
ESTIMATION OF PRODUCTIVITY FOR EXCAVATOR

3600
Hourly Production, Q (m3/hr) = q × × Efficiency
C
Where,
q – production per cycle (m3)
C – cycle time (s)
Production per cycle, q = q1 × s × k

Where,
q1 – heaped capacity as per specifications of the excavator
s – swell factor
k – bucket factor, varies between 0.4 to 1
Cycle Time = Time required for one cycle (Excavation + Swing + Dump + Back Swing)

100
Swell Factor =
100 + percentage of swell
Loose Cubic Meter (LCM) weight = Bank Cubic Meter (BCM) weight × Swell Factor
Loose Cubic Meter (LCM) weight
Bank Cubic Meter (BCM) weight =
Swell Factor
Excavator Output = Ideal Output × Correction Factor × Performance Factor

Ideal Output in Loose Cubic Meter (LCM) = Bucket output/cycle × Cycle/hour
ESTIMATION OF PRODUCTIVITY FOR DOZER

60
Output of a dozer in bank-volume/hr = loose volume handled/trip × S × × Efficiency
t
Where,
S – Swell Factor
t – Cycle Time (min)
Loose volume handled/trip = Blade width × (Blade Height)2 × Blade Factor
Blade Factor varies between 0.4 – 1.1
Cycle Time = Time required for one cycle (Dozing + Returning)
D D
= + +G
F R
Where,
D – Haul distance (m)
F – Forward Speed (m/min)
R – Reverse Speed (m/min)
G – Gear shifting time (min)
Dozer Output = Ideal Output × Correction Factor × Performance Factor

Dozer Optimum Output = Dozer ideal output × Correction Factor
Dozer Planning Data = Dozer Optimum Output × Performance Factor
ESTIMATION OF PRODUCTIVITY FOR COMPACTOR
Surface Capacity of the Compactor – the area of the surface compacted in an hour neglecting the
thickness of the layer.
W × S ×1000
Surface Capacity, Q = × Efficiency
P
Where,
W – Drum width (m)
S – Average Compaction Speed (km/hr)
P – Number of passes
Volumetric Capacity of the Compactor – the volume of the earth compacted in an hour taking into
consideration the thickness of the layer.
W × S ×T × 1000
Volumetric Capacity, Q = × Efficiency
P

Where,
W – Drum width (m)
S – Average Compaction Speed (km/hr)
P – Number of passes
T – Layer thickness after compaction (m)
ESTIMATION OF PRODUCTIVITY FOR GRADER
Output of a grader = Area covered by the grader/hr.

= Effective width of the blade × Average Speed × Efficiency
No. of passes × Distance (km)
Time to complete a job (hrs.) =
Average Speed (km/hr) × Efficiency Factor
ESTIMATION OF PRODUCTIVITY FOR DUMPER

60 min
Hauler production per hour = × Hauler’s payload per cycle (m3)
Cycle Time (min)
Cycle Time = Time required for one cycle
(Loading + Hauling + Dumping and Turning + Return + Spotting and Waiting)
Length of Road Section (km)

Travel Time = × 60
Average Speed over Road Section (km/hr)
Cd
Number of dump trucks required per loader =
n × C1
Where,
Cd – Cycle time of a dump truck (min)
N – No. of cycles required for a loader to fill a dump truck
C1 – Cycle time of a loader (min)
COSTS ASSOCIATED WITH EQUIPMENT

The following are the costs associated with the equipment,
(i) OWNING COST
a. Investment Cost
b. Depreciation Cost
c. Major Repair Cost
(ii) OPERATING COST

a. Cost of fuel
b. Cost of lubricants
c. Servicing and maintenance cost
d. Labor cost
e. Cost of field repairs
f. Various other overheads

OWNING COST
A. INVESTMENT COST
This is a kind of fixed cost and continues to be incurred whether the equipment is used or not.
Investment cost comprises of the following,
i. Interested on the money invested in the procurement of the equipment.
ii. Various taxes on the equipment.
iii. Insurance expenses.
iv. Storage costs.
Investment costs are taken as about 10 – 15 % of the total cost of the equipment.
B. DEPRECIATION
Due to use and obsolescence, every equipment loses its value. This loss is accounted for by
depreciating the equipment every year. The efficiency and value of machine constantly reduces
with the lapse of time during the use is known as depreciation. Some money must be set aside
yearly from the profits, so that when an equipment become uneconomical, it can be replaced by
the new one.
Suppose a contractor purchases a machine for his production but after some duration a better
machine comes in the market, whose production rate is very high and is more economical.
Although the old machine is efficient but becomes out of fashion and uneconomical due to the
new better machine which has come in the market. This is known as Obsolescence.
Depreciation can be classified as,
1) Depreciation due to physical condition
(i) Wear and tear
(ii) Physical decay
(iii) Accidental
(iv) Deferred maintenance and neglect
2) Depreciation due to functional condition
(i) Inadequacy
(ii) Obsolescence
(i) Depreciation Due to Wear and Tear - Everybody knows that when any machinery performs work,
wear and tear of certain components takes place, although sufficient precautions are taken i.e.
proper lubricating and cooling is done, which minimize wear and tear but it cannot be totally
prevented. The cost of replacement because of this cause ; is the value of depreciation due to wear
and tear.
(ii) Depreciation Due to Physical Decay - There are certain items which get decay, because of climatic
and atmospheric effect, with the result the value of these articles goes on reducing with the lapse of
time. Although every effort is made by the owner to keep them in serviceable condition, even then
because of climatic and atmospheric effect, there will be reduction in their value. This reduction in
cost is depreciation due to physical decay.
(iii) Accidental Depreciation - Although, the machine might have installed even few days back and
sufficient care is taken to prevent accident, even then, accident may occur due to some wrong
operation, or some loose component or some other cause, which may result in a heavy damage. The
depreciation in machine caused due to this reason is called accidental depreciation.
Now-a-days, to cover this risk most of the owners get their equipment insured with the insurance
companies. For that owners have to pay certain premium yearly. The amount of premium depends
upon the cost and life of equipment.

(iv) Depreciation Due to Deferred maintenance and Neglect - Every manufacturer supplies certain
instructions for the smooth and efficient running of an equipment. If these instructions are not
properly followed because of neglect and proper maintenance is not done as recommended by
manufacturer, the life of the vehicle may be reduced, and depreciation in value because of this, is
called depreciation due to deferred maintenance and neglect.
(vi) Inadequacy - This is the form of functional depreciation. Inadequacy means reduction a efficiency
of an asset. This may result firstly, even if any equipment is serviced under proper precautions and
sufficient maintenance is provided, there is fall in efficiency with the lapse of time.
Secondly, suppose after 2-3 years of running, the work requirement is increased, but the plant cannot
cope-up with the increased demand. This needs additional money either to replace with the bigger
size plant or installation of additional similar plants. This is what is called depreciation due to
inadequacy.
(vii) Depreciation by obsolescence - Now-a-days because of scientific advancement, there are large
changes every day. If a new machine comes in the market which is more efficient because of new
invention and better design than the existing one, and the production by the new one is much
cheaper and better then the existing machine has to be replaced to withstand market competition.
this is called depreciation by obsolescence and is of functional type.
METHODS OF CALCULATING DEPRECIATION

The following are the methods for calculating depreciation,
i. Straight line method
ii. Diminishing balance method
iii. Sinking fund method
iv. Annuity charging method
v. The insurance policy method
vi. The re-valuation method
vii. Machine-hour basis method
viii. The sum of the years digits method
Out of the above, straight line method and diminishing balance method are commonly used.
 STRAIGHT LINE METHOD

This method assumes that the loss of value of machine is directly proportional to its age. Straight line
method is also known as “Fixed Installment Method”, because every year some fixed amount is
deducted and no consideration is made about the maintenance and repair charges, which gradually
increases as the machine is getting old.
𝐶−𝑆
Depreciation amount per year, D =
𝑁
Where,
C – Initial cost of the machine
S – Salvage value
N – Useful life of the equipment
Book value of the equipment at the end of t years, Bt = Bt-1 – Dt
 DIMINISHING BALANCE METHOD

This is also called “Reducing Balance Method”. The diminishing value of an equipment is greater in
the early years. It depreciates rapidly in the early years and later on slowly. Therefore, it is better to
depreciate more during the early years, when the repair and renewals are not costly. In this method,

the book value of the machine goes on decreasing as its existence continues. A certain percentage of
the current book value is taken as depreciation. Therefore, this is also called “Percentage on Book
Value Method”.
Let x be the fixed percentage taken to the to calculate the yearly depreciation on the book value,
1
𝑆 𝑁
X= 1 - ( )
𝐶
Where,
C – Initial cost
S – Salvage value
N – Useful life on the equipment
 SUM OF THE YEARS-DIGITS METHOD

This method is similar to the Diminishing Balance Method i.e. the rate of depreciation is the highest
for the first year and then it decreases.
N(N+1)
Sum of years (SOY) =
2
(N−m+1)
Rate of depreciation (Rm) =
SOY
Annual depreciation for mth year, D = Rm (C – S)
 DECLINING BALANCE METHOD

Declining balance method of depreciation is a technique of accelerated depreciation in which the
amount of depreciation that is charged to an asset declines over time. In other words, more
depreciation is charged during the beginning of the life time and less is charged during the end.
Declining method range from 1.25 times the book value divided by life to 2 times the current book
value divided by the life. (The latter is termed as Double Declining Method)
1.25 2
Rate of Depreciation, Rm = 𝑡𝑜
𝑁 𝑁
Annual Depreciation, Dm = Rm × BVm-1
Even though estimated salvage value C is not included in calculation, the book value cannot go below
the salvage value.
SALVAGE VALUE OF AN EQUIPMENT – Salvage value is the estimated resale value of an equipment at
the end of its useful life. Salvage value is subtracted from the Initial cost to determine the amount
of the initial cost that will be depreciated. Thus, salvage value is used as a component of the
depreciation calculation.
SCRAP VALUE OF AN EQUIPMENT – Scrap value is the worth of individual components of an equipment
when the equipment itself is deemed no longer usable. The individual components (scrap) are worth
something if they can be put to other uses.
BOOK VALUE OF AN EQUIPMENT – Book value of an equipment is the value at which the particular
equipment is carried on a company’s balance sheet and is calculated by taking the cost of an asset
minus the accumulated depreciation.
C. MAJOR REPAIR COST

While minor or field repairs are carried out during the day to day working of the equipment, the
major repairs are carried out after the substantial use of the equipment. Major repairs and overhauls

are the replacement of major parts of the equipment because of the excessive wear through a long
period of use. Since these repairs require a heavy amount of expenditure, they are met from the
major repair fund. The major repair cost is spread out during the entire life span of the equipment
and a flat rate is levied per working hour in order to have a uniform rate. The amount thus collected
in the pool is known as major pair fund, and major repairs and overhauls are carried out from this
pool.
Usual practice is to consider this major repair cost as a percentage of straight line depreciation cost
and is generally taken as 80 to 200% of the cost of depreciation depending on the type of
equipment’s.
OPERATING COSTS
A. COST OF FUEL
Prime-movers for construction equipment’s are generally diesel engines or electric motors. The
actual consumption of fuel or electricity in these construction equipment depends upon:
(i) Engine B.H.P.
(ii) The load factor, which means the extent to which the engine will operate at full power. It
generally vary from 30 - 70%.
(iii) The conditions of the engine.
Optimum fuel consumption in liters per hour per H.P. is calculated using following formula:
Fuel consumption = 0.27 x load factor
B. COST OF LUBRICANT
Lubricants include the following :
(i) Engine oil
(ii) Transmission oil
(iii) Greases etc.
(iv) Air filter oil
(v) Hydraulic oil
The quantity of lubricating oil depends upon various factors. Some of these factors are:
(i) Capacity of the crank case
(ii) Condition of piston rings
(iii) Number of hours between oil changes.
Quantity of lubricating oil required per hour can be estimated using the following formula,
𝐻. 𝑃. × 𝑓 × 0.006 × 4.5 𝐶
𝑄= +
7.4 𝑇
Where,
Q – Quantity of oil consumed (l/hr)
HP – Rated Horse Power of the engine
f – Operating factor
C – Capacity of crank case (l)
t – Number of hours between the oil change
C. SERVICING AND MAINTENANCE COST

Regular servicing and maintenance of' each equipment is very essential in order to have the
equipment in reliable and perfect condition of working. This cost includes :
(i) Change of lubricants.
(ii) Checking and servicing of fuel and lubricating systems, including change of filter elements.

(iii) Care of tyre’s and tubes.

(iv) Care of battery and electrical system.
(v) Cleaning of the equipment and other similar works.
(vi) Salaries of staff engaged on maintenance and servicing.
D. LABOR COST
Labor cost is an important element of operating cost and contributing a major part of it. Labor
cost element includes the salaries of operators, and helpers engaged on the equipment. Provision
for leave reserve (may vary from 10 - 12%) is also made under the head of labor cost. A percentage
of the wages of supervisory staff, depending upon the attention required on that particular
equipment, is also to be added.
E. COST OF FIELD REPAIRS

This is the cost incurred on minor repairs which are carried out on the site or in field workshops.
These repairs include replacement of minor parts, such as fan belts, filters, bearings, wire ropes
etc. and other adjustments required to be carried out during normal working of the equipment.
F. OVERHEADS
These are the charges which are incurred on complete fleet of the equipment. Therefore,
proportional expenditure is booked under this head on each equipment. These charges includes
the pay on watchman, light and water charges in the storage yards, uniform to the operating and
maintenance staff etc.
SELECTION OF CONSTRUCTION EQUIPMENT

Proper selection of equipment for a construction project is of vital importance for its speedy and
economical completion. Problem of equipment selection has become more complicated, because
large variety of equipment’s are being manufactured now a days. For proper selection of equipment,
a considerable experience in the operation and maintenance in the field is essential. The following
are the main points which should be considered in the process of equipment selection,
i. Suitability for Job Conditions – The equipment must the requirement of the work, climate
and working conditions.
ii. Size of the Equipment – Size of equipment should be such that it must be able to be used
with other matching units. If the equipment selected is of larger size, that will remain idle for
most of the time or shall work on part loads, which means production cost will be more.
On other side, if the equipment is of smaller size than desired, the equipment will not be able
to work with the matching equipment’s and hence other equipment’s will have to remain idle
or to be allowed to work on part loads, which shall again be uneconomical.
iii. Standardization – It is better to have same type and size of equipment’s in the project. It
means lesser spare parts reserve, more interchangeability of parts if required, easy for the
operators to understand it, mechanics will be able to maintain and repair better as they
become expert by handling similar type of equipment.
iv. Availability of Equipment – The equipment which is easily available in the market should be
purchased. It should also be ensured that the equipment is of reputed and is likely to be
continued to be manufactured in future also. This is necessary for future standardization and
ensuring spare parts supply.
v. Availability of Spare Parts – While selecting a particular type or make of equipment, it should
be ensured that the spare parts will be available at reasonable price throughout the working
life of the equipment.
vi. Versatility – There are certain types of equipment’s which are not utilized fully. Therefore if
possible, they must be capable of performing more than one function for example, excavator
with wheel loader bucket arrangement or with rock breaker attachment.

vii. Availability of know-how – The equipment selected should be satisfactorily handled by

available operators and mechanics.
viii. Use in Future Projects – When equipment completes only a part of their useful life in a
project, it should be kept in view that the equipment can be used in future projects and may
not become obsolete.
ix. The Economical Aspects – While selecting the equipment, it should be considered that the
cost of unit production should be minimum.
x. Reliability of the Equipment – Equipment selected for the project must be reliable one.
xi. Service Support – Service support should be available in the area of project where the
equipment shall be used. Service after sales is a major criteria for selection of equipment.
xii. Operating Requirements – The equipment selected should be easy to operate and maintain,
acceptable to the operator and should have lesser fuel consumption.
xiii. Past Performance – If the equipment being purchased is of new make and model, it is
desirable to enquire about its performance from other users, who are using the same.
xiv. The size and numbers should be such that full life is utilized in the project with very little
residuals.
xv. Reputation of the manufacturer.
xvi. Warranty or guarantee by the manufacturer.
EQUIPMENT MAINTENENCE
Every machine is thoroughly tested and inspected by the manufacturer before selling it, and by the
purchaser before it is put to use. When it is used, it is subjected to wear and tear hence proper
attention should be given to protect them from failures. A proper attention means lubrication,
cleaning, timely inspection and systematic maintenance. Maintenance of a machine means efforts
directed towards the up-keep and the repair of that machine.
Maintenance is responsible for the smooth and efficient working of an equipment and helps to
improving its productivity. It also help in keeping the machine in a state of maximum efficiency with
economy.
Objectives of maintenance
i. To maximize the availability of plant, equipment and machinery for productive purpose.
ii. To extend the lifespan of the plant, equipment and other facilities by minimizing their wear
and tear.
iii. To ensure operational readiness of equipment at all times.
iv. To reduce the cost of lost production due to breakdown.
v. To provide information to the management on the cost and effectiveness of management.
vi. To ensure safety through regular inspection and maintenance of plant, equipment and other
facilities such as compressors, elevators, material handling equipment etc.
Types of maintenance
Breakdown Maintenance: In breakdown maintenance, defects are rectified only when the machine
cannot perform its function any longer and the production department is compelled to call on the
maintenance engineer for the repairs. After repairing the defect, the maintenance engineers do not
attend the machine again until another failure occurs.
Preventive Maintenance: It aims to locate the sources of trouble and to remove them before the
breakdown occurs. It is also called scheduled maintenance. Preventive maintenance helps to find out
the reasons leading to breakdown and to rectify them, when they are in minor stages. Further this
repair requires lesser time as compared to that of the breakdown repair and thus downtime is
reduced by doing preventive maintenance.

CONSTRUCTION MATERIAL MANAGEMENT
Construction industry requires and utilize a large number of material items to achieve their end
product. Thus, materials constitute the major cost component of the construction industry.
Depending on the type of the project and the extent of mechanization, the total cost of materials
may exceed 60% of the total cost of the project. Such a large investment requires considerable
planning and control to minimize the cost overrun, which invariably affects the performance of the
organization.
Material management is an important element in the project management. It involves in the
coordination of planning, identification, sourcing, procuring, storage, distribution and controlling of
materials in an optimum manner. Material management assures that the materials of right quality
are in the right place, in the right quantities at an optimum cost when needed. Thus, the key to the
success of a construction project is its effective construction material management process which for
many years has evolved and changed with respect to the ever-growing complexities of projects.
Material management is defined as, “Scientific technique concerned with Planning, Organizing and
control of flow of materials from their initial purchase to destination”.
IMPORTANCE OF MATERIAL MANAGEMENT

i. Greater promise as a cost reducing device
ii. Result in improved production capacity of plants
iii. Saving of labor time
iv. Reduction in inventory and storage space
v. Reduction in damage to materials
vi. Smooth flow of production
vii. Easier production control
viii. Reduced employee fatigue
ix. Better utilization of resources
FUNCTIONS OF MATERIAL MANAGEMENT

The functions of the material management includes,
a) Material Planning and Programming: This consists of determining the total material
requirement for any project by considering all factors. It also consists of laying down
standards for the materials, substitutes, sources of supply etc.
b) Material Purchasing: This consists of locating and developing sources of supply, market
research for purchasing, calling of tenders, selection of suppliers, negotiations, contracting
and issuing of purchase orders.
c) Store Keeping: This involves receiving and custody of purchased materials. The materials
should be stored in such a way that handling and damage caused is minimum.
d) Inventory Control: This is a system of locating, storing and recording of goods so that they
can be made available to the actual site at minimum total expenditure.
e) Quality Control and Inspection: Quality control is the control of quality during manufacturing.
Inspection consists of comparing the actual products against previously laid down standards
and specifications.
f) Material Handling: From the receipt of goods, inspection in the storage and issue for use,
materials should be handled in such a way so as to cause minimum damage.
g) Standardization and Generalization: Standard and generalization (or simplification) ensures
proper utilization of materials and diminishes wastage.
h) Material coding and classification: It is used for the purposes of classifying and storing
materials, which are identified by their codes and nomenclatures. The coding methods helps
to keep a check on the range of materials, their quantities and costs.

i) Disposal of Surplus, Obsolete and Scrap stock: If surplus, obsolete and scrap stock is held in
possession, this involves inventory carrying, storage and security costs. Hence, this should be
disposed of as soon as possible.
INVENTORY MANAGEMENT
Inventory management is an important component of material management. It is the process of
storing and supplying the planned materials at an optimum cost. An inventory system consists of a
set of policies and controls that monitors the levels of inventory and determines what levels should
be maintained, when the stock should be replenished, and how large the orders should be.
Inventory is a detailed list of movable goods such as raw materials, materials in process, finished
products, general supplies and equipment’s etc. and gives the quality and value of each item.
Types of inventory
Depending on the type of usage and its point of entry into the operation, inventory can be classified
into,
 Raw Materials – Steel, Cement, etc.
 Work in Progress Materials
 Finished Goods
 Tools – Drill bit, Hammers, Chisels, etc.
 Consumables – Diesel, Welding Electrodes, Oil and Grease, etc.
 Spares – Spare items of Machine and Equipment
Importance of inventory
The stores system acts as a ‘buffer’ for reducing the ‘tight coupling’ between supply and demand. It
is an unavoidable system necessary for planned production. However, if the hidden costs incurred
for stocking the materials are not taken care and techniques controlling such hidden costs are not
followed, the total cost of material increases and makes the end product costlier. To keep the price
of end product within the competitive limits, one needs to control the stocking cost of materials
carefully. This is possible only if materials are conceived as inventory rather than a physical stock.
Purpose of inventory
Inventory control plays a very important role in an organization and adds flexibility in the operation
of the firm. The following are the uses of inventory,
1. The decoupling function i.e. the inventory acts as a buffer
2. Inventory can be used as a storing resources during work in progress
3. Inventory helps when there is irregular supply and demand
4. Quantity discounts when purchased in large quantities
5. Avoiding stock outs and shortages
INVENTORY CONTROL
It may be defined as “the systematic location, storage and recording of goods in such a way that
desired degree of service can be made to the operating shops at minimum ultimate cost”.
The Need of Inventory Control

The necessity of inventory control is to maintain a reserve (store) of goods that will ensure
requirement at the lowest possible ultimate cost. Losses from improper inventory control include
purchases in excess than what needed ; the cost of slowed up production resulting from material not
being available when wanted, each time a machine is shut down for lack of materials or each time
sale is postponed or cancelled for lack of material, thus loses money. To promote smooth operation

and to prevent piling up or idle machine times proper material must be on hand when it is wanted.
Proper inventory control can reduce such losses to a great extent.
Functions of Inventory Control

The following are the most important functions of Inventory Control,
(a) To run the stores effectively. This includes layout, storing media (bins, Shelves and open
space etc.), utilization of storage space, receiving and issuing procedures etc.
(b) To ensure timely availability of material and avoid build up of stock levels.
(c) Technical responsibility for the state of material. This includes methods of storing,
maintenance procedures, studies of deterioration and obsolescence.
(d) Stock Control system. Physical verification (stock-taking) records, ordering policies and
procedures for the purchase of goods.
(e) Maintenance of specified raw materials, general supplies, work in process and component
parts in sufficient quantities to meet the demand of production.
(f) Protecting the inventory from losses due to improper handling and storing of goods and
unauthorized removal from stores.
(g) Pricing all materials supplied to the shops so as to estimate materials cost.
Essential Steps in Inventory Control

It is essential that the necessary materials shall be in hand when required and it is just as essential
that no more stocks shall be carried than is necessary. The maximum and minimum quantities of all
stocks should, therefore, be fixed with much care. In several cases these limits can be set only by
experience and careful observations. It is found that this results in a great reduction of Inventory.
There are five important quantity standards used as tools to control inventory. They are,
(1) The Maximum Stores: This term is applied to designate the upper limit of the inventory and
represents the largest quantity which in the interest of economy should generally be kept in stores.
(2) The Minimum Stores: This term is applied to designate the lower limit of the inventory and
represents a reserve or margin of safety to be used in case of emergency. When requirement have
been abnormal it is intended that there must always be at least this quantity available in stores.
(3) The Standard Order: It is the quantity to be purchased at any time. Repeat order for a given
product are always for this amount until the order is revised.
(4) The Ordering Point: This represents the quantity required to ensure against exhaustion of the
supply during the interval between the placement of an order and delivery. When the balance {alls
to this level, it is an indication that a new purchase order must be placed.
(5) Lead Time: It is the time which takes the stock to reach from Recorder Point to Minimum Stock
level.

Advantages of Inventory Control

i. It creates buffer between input and output.
ii. It ensures against delays in deliveries.
iii. It allows for a possible increase in output.
iv. It allows advantage of quantity discounts.
v. It ensures against scarcity of materials in the market.
vi. It utilizes the benefit of price fluctuations.

MODULE 3: CONSTRUCTION QUALITY, SAFETY AND HUMAN VALUES
CONSTRUCTION QUALITY – INTRODUCTION

In any competitive economy, for an organisation to stay in operation, continuous cost reduction and
quality improvements are essential. Competitiveness is measured by 3 parameters,
 Quality
 Price
 Delivery
The word quality is often used to satisfy customers. It signifies excellence of a product or service. In
companies it is used to indicate that the product conforms to certain physical dimensional
characteristics or specifications. Thus, the word ‘Quality’ has multiple meanings. The following two
are used extensively,
 Quality consists of those product features, which meet the needs of customers, thereby
providing product satisfaction.
 Quality consists of freedom from deficiencies.
Various definitions of quality:

i. Fitness for purpose or use – Juran
ii. Quality is conformance to requirements – crossby
iii. The totality of features and characteristics of a product or service that bear on its ability to
satisfy stated or implied needs – ISO 840
iv. Quality meets the requirements of the customers both internal and external, the organisation
for defect free product, services and business process – IBM
v. Quality is the degree of excellence at an acceptance price and control of variability at an
acceptable cost – Broh
DIMENSIONS OF QUALITY
 PERFORMANCE – It is the main operating characteristic of a product. It describes how well
the product or service performs the customers intended use. Eg. Comforts, speed, handling
 FEATURES – It is the second dimension of quality. It enhances the products basic
function/characteristics that appeal to customers. Eg. Remote control for TV, power steering
and central locking system for automobile etc.
 RELIABILITY – It is the third dimension of quality. It reflects the probability of a product failing
within a specified period of time. Most common measures are Mean Time to First Failure,
Mean Time Between Failures and Failure Rate per Unit Time.
 CONFORMANCE – The extent to which the product design and operating characteristics
satisfy the pre-determined standard.
 DURABILITY – It is the measure of products useful life. It has both economic and technical
dimensions.
 SERVICEABILITY – It is the time consumed in servicing, courtesy, competence and ease of
repair or re-conditioning of a product.
 AESTHETICS – This is more subjective and closely related to user based approach i.e. human
response to a product. Eg. How it looks, feels, sounds, tastes or smells.

 PERCEIVED QUALITY – Customers impression formed about the products quality from
tangible and in-tangible features of the product, brand, image, good will and the reputation
of the organisation.
BENEFITS OF QUALITY
Producing superior quality products or providing a quality service is vital to the continued growth and
success of a firm. The following are some of the benefits of quality to a firm,
 It gives a positive company image.
 It improves competitive ability both nationally and internationally.
 It increases market share, which translates into improved profits.
 Overall, it reduces costs, which translates into improved profits.
 It reduces or eliminates product liability problems avoiding unnecessary costs.
 It creates an atmosphere for high employee morale, which improves productivity.
CONSTRUCTION QUALITY PROCESS (CONSTRUCTION QUALITY MANAGEMENT)

Quality management is a cross-functional in nature and involves the entire organisation. Operations
in an organisation have a special responsibility to produce a quality product or service which is
consistent for the customer. It has four main components,
 Quality Planning
 Quality Assurance
 Quality Control
 Quality Improvement
QUALITY PLANNING – It is the systematic process that translates quality policy into measurable
objectives and requirements and lays down a sequence of steps for realising them within a specified
time frame. The following are the steps involved in the quality planning process,
 Identify the customer – both internal and external
 Determine customer needs
 Develop product features that responds to customer needs
 Establish quality goals that meet the needs of customers and suppliers alike and do so at a
minimum combined cost
 Develop a process that can produce the needed product features
 Prove process capability
QUALITY CONTROL – Quality control refers to all those functions or activities that must be performed
to fulfil the company’s quality objectives. Quality control begins long before products and services
are delivered to the customers. Quality control involves,
 Setting of quality targets
 Appraisal of conformance
 Taking corrective action where any deviation is noticed
 Planning for improvements in quality

Objectives of Quality Control

 To establish standards of quality which are acceptable to the customer and economical to
maintain such standard.
 To enable the setting and resetting of process and machinery. It enables to know the
performance of similar machines and operations.
 To keep up the quality of products during manufacturing by taking remedial steps.
 To locate and identify the process faults and defects of products and thus to control the scraps
and wastes.
 To take different measures to improve the standard quality of products.
 To see that the products of lower quality do not reach customers.
 To enable reduction in operating costs by not producing defective goods.
 To develop quality reputation which is of prime importance in selling both consumers and
industrial goods.
Importance/ Benefits of Quality Control

 It increases the profit earning capacity of the business.
 It enables the industry to compare successfully.
 It reduces the cost of production.
 It reduces operation losses by keeping scrap and wastes to a minimum.
 It improves the product design.
 It reduces product line bottleneck.
 It improves employee’s morale.
 It enhances customer satisfaction.
 It increases the reputation of the industry.
Functions of Quality Control Department

The Quality Control department,
 Advices on the inspection and quality control policy formulated.
 Sets inspection standards in the light of design-engineering tolerances.
 Prepares department budget requests and controls operating expenses.
 Selects inspection points, including receiving room, department clearance and final
inspections.
 Selects inspection gauges and instruments and sees that maintenance keeps each in good
working order at all times.
 Collaborates with statisticians on choice of types of statistical quality control charts to be
used.
 Generates deviation reports for further rectifications.
 Trains inspectors on duties and in using inspection standards.
QUALITY ASSURANCE – Quality assurance in a broad sense refers to any action directed towards
providing consumers with products of appropriate quality. It is intended to include all the activities
that are preformed to ensure that the product performs to the customer’s satisfaction and many
departments are involved in this effort. Some of the activities involved in quality assurance are,

 Reliability engineering to ensure that the design will have an adequate useful life.
 Value engineering to ensure that the product will perform the necessary function at the
minimum cost.
 Evaluation of usability to see that the product will be convenient and safe in the hands of the
user.
 Process control, to ensure that the material, process and other input to the transformation
process are adequate for the intended product.
 Product screening and appraisal to see that the output that is sold to the customer is of
sufficient quality.
 Service assurance to see that the customer is adequately trained to use and maintain the
product and the spare parts and manuals are made available.
 Quality feedback to provide corrective action when field use indicates inadequate quality.
QUALITY IMPROVEMENT – Quality improvement means finding ways to do better than standard and
breaking through the unprecedented levels of performance. The desired end levels are quality levels
that are even higher than the planned performance levels. It is the systematic approach to reduction
or elimination of waste, rework and losses in production process. According to Joseph M Juran,
proper quality planning and quality control leads to quality improvement.
QUALITY INSPECTION – Inspection is the most common method of attaining standardisation,

uniformity and quality of workmanship. It helps in,
 Interpretation of the specified standard.
 Measurement of the product in the light of specification.
 Judging whether a given item of product falls within the specified limits of variability.
 Approval or rejection of the given item of product under inspection.
Inspection devices – most of the instruments used for inspection are known as gauges. These gauges
investigates the dimensional fitness of a mechanical element in relation to its predetermined
dimensional standards. The most commonly used gauges are fixed size gauges, micrometer gauges,
air gauges etc. Electronic inspection devices are becoming more popular in recent times. These
devices are used in testing and sorting of traits, in checking internal characteristics of products,
recording and controlling of pressure, smoke heat, humidity etc. Electronic inspection devices readily
reject faulty and defective articles.
COST OF QUALITY
The cost of quality or cost of poor quality are associated with avoiding poor quality or incurred as a
result of poor quality.
The objectives of cost of quality are,
 To translate quality problems into the language of top management in terms of money.
 To help management evaluate the relative importance of quality problems and thus identify
major opportunities for cost reduction.
 To aid budgeting and cost control activities.
 To serve as a scoreboard to evaluate the organisation’s success in achieving quality objectives.

So, to establish cost of quality approach, it is necessary to identify the activities that generate cost,
measure them, report them in a way that is meaningful to managers and analyse them to identify
areas for improvement.
Quality Costs can be categorised as,
 Prevention Cost
 Appraisal Cost
 Internal Failure Cost
 External Failure Cost
PREVENTION COST – Prevention Costs are associated with prevention of defects. They include the
following,
 Quality Planning – Costs of creating and communicating plans and data systems for quality,
inspection, reliabilities and related activities such as cost of preparing all necessary manuals
and procedures.
 New Product Review – Costs of preparing bid proposal, evaluating new design, preparing test
and experimentation programmes and related quality activities associated with launching
new products.
 Training – Costs of developing and conducting training programmes aimed at improving
quality performance.
 Process Control – Costs of process control aimed at achieving fitness for use, as distinguished
from productivity of difficult distinction to make in practice.
 Quality data acquisition and analysis – Costs of operating the quality data system to get new
data on quality performance.
 Quality Reporting – Costs of bringing together and presenting quality data to upper
management.
 Improvement Projects – Costs of building and implementing breakthrough projects.
APPRAISAL COST – Appraisal costs are the costs associated with discovering the condition of products
and raw materials. They include the following,
 Incoming Material Inspection – Costs associated with determining the quality of vendors
products.
 Inspection and Test – Cost of checking product conformance throughout design and
manufacture, including test done on customer’s premises.
 Maintaining the accuracy of test equipment – Cost of operating and maintaining measuring
equipment.
 Materials and Services consumed – Costs of products consumed in destructive tests and also
materials and service like electric power consumed in testing.
 Evaluation of Stocks – Costs of testing products in storage to assess their conditions.
INTERNAL FAILURE COST – Internal failure costs are associated with product defects found before
shipments to the customer. They include the following,
 Scrap – Net losses in labour and material resulting from defective goods that cannot
economically be repaired or used.
 Rework – Costs of correcting defective products to make them usable.

 Retest – Cost of re-inspection and retesting of products that have been reworked.
 Down Time – Costs of idle facilities, equipment’s and labour due to defective products.
 Yield Losses – Costs of process yields lower than that which could be attained through
improved process control.
 Disposition – The time of involved in determining whether non-conforming products are
usable and what should be done with them.
EXTERNAL FAILURE COST – External failure costs are associated with products defects found after
shipment to the customers. They include the following,
 Complaint Adjustment – Cost of investigating and responding to complaints due to defective
products, faulty installation or improper instructions to users.
 Returned Materials – Cost associated with receiving and replacing defective products
returned from the field.
 Warranty Charges – Costs of services and repairs performed under warranty contracts.
 Allowances – Income losses due to downgrading products for sale as seconds and to
concessions made to customers who accept sub-standard products as is.
ISO STANDARDS
QUALITY MANAGEMENT SYSTEM
A quality management system (QMS) is a formalized system that documents processes, procedures,
and responsibilities for achieving quality policies and objectives. A QMS helps coordinate and direct
an organisation’s activities to meet customer and regulatory requirements and improve its
effectiveness and efficiency on a continuous basis. Advantages of QMS includes improving processes,
reducing waste, lowering costs, facilitating and identifying training opportunities etc.
ISO 9000: QMS – Fundamentals and vocabulary

ISO 9000 is a set or series or family of international standards on quality management and quality
assurance developed to help companies effectively document the quality system elements to be
implemented to maintain an efficient quality system. They are not specific to any one industry and
can be applied to organisations of any size. This standard lays out the fundamentals and vocabulary
of Quality Management System. ISO 9000 can help a company satisfy its customers, meet regulatory
requirements, and achieve continual improvement. However, it should be considered as a first step,
the base level of a quality system, not a complete guarantee of quality.
ISO 9001: QMS – Requirements

ISO 9001 sets out the criteria for a quality management system and is the only standard in the ISO
9000 family that can be certified, although this is not a requirement. It can be used by any
organisation, large or small, regardless of its field of activity. This standard is based on seven quality
management principles, including a strong customer focus, leadership, engagement of people,
process approach, continual improvement, evidence based decision making and relationship
management. Using ISO 9001 helps to ensure that customers get consistent, good quality products
and services, which in turn brings many business benefits.

ISO 9004: QMS – Managing for the sustained success of an organisation

ISO 9004 provides a wider focus on quality management than ISO 9001. It addresses the needs and
expectations of all interested parties and their satisfaction, by the systematic and continual
improvement of the organisation’s performance. It provides guidance to management for achieving
sustained success of any organisation in a complex, demanding and ever changing environment. The
sustained success of an organisation is demonstrated by its ability to satisfy the needs and
expectations of its customers and other interested parties over the long term and in a balanced way.
This can be achieved through awareness of the organisation's environment, the effective
management of opportunities and risks, learning from experience, and through the application of
improvement and innovation.
ISO 19011: Guidelines for auditing management systems

IOS 19011 provides guidance for any organisation on auditing management systems. It covers the
principles of auditing, managing an audit program, conducting management system audits and
evaluating individuals involved in the audit process.
TOTAL QUALITY MANAGEMENT

Total Quality Management (TQM) is a philosophy that involves everyone in an organisation in a
continual effort to improve quality and achieve customer satisfaction. There are two key philosophies
in TQM,
i. Never ending push to improve i.e. continuous improvement
ii. Customer satisfaction which involves meeting or exceeding customer expectations.
Principles of TQM
Total Quality Management stresses on three main principles,
 CUSTOMER SATISFACTION – It is a relative concept that varies from one customer to another.
Also, a customer may be satisfied with today’s product but not satisfied in the future. Each
person defines quality in relation to his/ her own needs and means at a particular point of
time.
 EMPLOYEE INVOLVEMENT – Employee involvement in quality management is crucial in
achieving and sustaining high levels of quality. Employee’s may have to be empowered to
take preventive and if necessary corrective actions without management approval.
Employee’s must be involved in quality management by encouraging them to use quality
control tools and techniques to track performance and identify areas needing improvement.
Employee training and motivation are essential for achieving and sustaining high levels of
service quality.
 CONTINUOUS IMPROVEMENT – It is a never ending process and is driven by knowledge and
problem solving.
In addition to the three basic principles, TQM is based on the following principles,
 Primary responsibility for the product quality rests with top management.
 Quality should be customer focused and evaluated using customer based standards.
 The production process and work methods must be designed consciously to achieve quality
of conformance.

 Quality cannot be inspected into a product. So, make it right the first time.
 Quality must be monitored to identify problems quickly and correctly.
 Companies must work with and extend TQM programs to their suppliers to ensure quality
inputs.
SALIENT FEATURES OF TQM APPROACH

 Find out what customers want. Customer includes both the internal customer as well as the
external customer.
 Design a product or service that will meet or exceed what customers want.
 Design a production process that facilitates doing the job right the first time.
 Keep track of the result and use those to guide improvement in the system. Never stop trying
to improve.
 Extend these concepts to suppliers and distributors.
BENEFITS OF TQM PROGRAMME

 To the customer – Fewer problems with the products/services, better customer care, grater
satisfaction
 To the company – Quality improves, motivates staff, increases productivity, reduces cost,
reduces defects, resolves problem faster, makes company a leader, reduces resistance to
change.
 To the staff – Empowerment, more training more skills, more recognition.
Advantages of adopting TQM system compared to conventional quality system

 TQM helps to focus clearly on the needs of the market in contrast, the traditional approach
of quality control focuses on the technical details of a product so as to satisfy the customer.
 TQM facilitates to aspire for a top quality performer in every sphere of activity.
 It channelizes the procedures necessary to achieve quality performance.
 It helps examine critically and continuously all processes to remove non-productivity activities
and waste.
 It gears organisation to fully understand the competition and develop an effective combating
strategy.
 It helps to develop good procedures for communication and acknowledging good work.
 It helps to review the process needed to develop the strategy of never ending improvement.
Reasons for the failure of TQM

 TQM approaches must be customised to each company. Many a times it so happens that
companies buy solutions off the shelf often sold by consultants.
 Managers sometimes become impatient with a short term focus. They will not understand
the importance of long term gains. Lack of this leads to implementation failure in many
organisations.
 Managers may focus too much on tools and techniques and may not properly understand
how to transform themselves, their employees and the organisation.

 Managers use TQM as quick fix to solve a variety of problems. These actions may be short
sighted and the managers may become frustrated when there is no quick achievement.
 Culture plays an important role in the transformation. Inability to change the culture leads to
the failure of TQM model.
 Lack of discipline requires transforming.
 Issues of strategic concerns to be addressed along with the issues related to the quality of
work life for employees. If the TQM efforts are misfocused and limited, it leads to failure.
 Inability to maintain momentum for transformation.
 In a lot of cases managers fail to understand the angles of relationship with suppliers and
customers. Mutual trust and support are the key to success.
 Quality should be understood in the same spirit and language both by the management and
the employees otherwise, implementation becomes difficult.

HEALTH, SAFETY and ENVIRONMENT – HSE
ACCIDENT
Occupational accident as an unexpected and unplanned occurrence, including acts of violence,
arising out of or in connection with work, which results in one or more workers incurring a personal
injury, disease, or death.
An accident is defined as “an event that is unplanned, undesired, unexpected and uncontrolled, and
one that may or may not result in damage to property or injury to person, or both, in the course of
employment”.
ACCIDENTS IN CONSTRUCTION INDUSTRY

Construction industry is employing approximately 5 % of the industrial workforce and is accounted
for about 14 % of all workplace deaths and 9 % of disabling injuries. The combined injury and illness
rate for the construction industry is higher than for all other industries. The accidents rate in
construction industry is at least four times higher than any other industry. The construction industry
continues to be a leader in the frequency of fatalities and disabling injuries. The major causes of
accidents are related to the unique nature of industry, human behaviour, difficult work site
conditions, and poor safety management practices. The prevention and even marginal reduction in
their cost will have a significant human and financial impact. Prevention of construction accidents
usually requires predicting future accidents and their nature under given circumstances. Making such
predictions must be based on knowledge about past accidents, and can be conducted using various
decision support tools, including those utilizing machine learning.
Accidents in the construction industry tend to be costly in both human and financial terms. These
expenses are concentrated in the areas of health care, litigations, management time, and worker's
compensation. Safety is not a luxury and may be considered as an important function to be used
against unnecessary loss of property, injury or death. Preventing occupational injuries and illness
should be a primary concern of all employers. Especially in developing countries, there must be an
effort to raise the level of awareness among both employees and employers of the importance Of
health and safety at work-sites.
CAUSES OF ACCIDENTS
In construction industry accidents are due to the following reasons,
i. Failing to identify an unsafe condition that existed before an activity was started or that
developed after an activity was started.
ii. Deciding to proceed with a work activity after the worker identifies an existing unsafe
condition.
iii. Carelessness of workers during the work i.e. the workers carrying heavy materials such as
stones, bricks, cement concrete etc., at higher level by moving over temporary support and
the painters and masons during plastering or masonry work. For walls at higher levels should
be more careful and the support should be string to carry the loads.
iv. During dismantling of the building, loose unprotected and unsafe parts such as walls, beam
etc., results in accidents.
v. The ignorance of workers during plastering operation.

vi. Due to overcrowding of workers at a particular spot of support there may be accident occurs
due to failure of support i.e. during the concreting operation at higher levels.
vii. The greediness of contractor will lead to the accident i.e. in trying to cut out the expenses he
makes use of defective materials for scaffolding and other types of supports and he engages
female and children labours to perform heavy jobs.
SAFETY PRECAUTIONS TO PREVENT ACCIDENTS

The safety precautions taken in general for any construction industry to prevent accidents are,
i. The supports provided at higher levels over which the workers move in connection with the
work should be strong and stable.
ii. For workers moving at higher levels the support should have side protections to prevent the
workers from falling due to slipping.
iii. No workers should be allowed to carry or lift any heavy load which can cause injury,
iv. Before dismantling the building all unsafe parts should be properly protected to prevent any
accidents to the workers.
v. No unskilled person should be engaged on jobs such as operation of heavy equipment’s like
bulldozers, cranes, etc.
vi. For workers engaged in operations such as welding, etc., effective screens or proper goggles
should be provided to the workers for the protection of eyes.
vii. No workers should be allowed to enter into pits or chambers or confined spaces where danger
fumes are present.
viii. Safety training should be provided for workers.
ix. Every hoist and lift and all heavy equipment and machinery should be properly maintained
and thoroughly examined by competent person.
x. For emergency works such as concreting, etc., carried in night times, lighting arrangements
should be properly provided.
xi. The working hour should be followed according to the act.
xii. Good house keeping.
xiii. Making use of personal safety devices and protective equipment’s (wearing Helmet, Safety
belt, etc.).
PERSONAL PROTECTIVE EQUIPMENT (PPE)

Personal protective equipment (PPE) refers to protective clothing, helmets, goggles or other garment
or equipment designed to protect the wearer's body from injury by blunt impacts, electrical hazards,
heat, chemicals and infection for job-related occupational health and safety purposes. OSHA (2007)
requires the use of personal protective equipment (PPE) to reduce employee exposure to hazards
when engineering and administrative controls are not feasible or effective in reducing these
exposures to acceptable levels. If PPE is to be used, a PPE program should be implemented. This
program should address the hazards present, the selection, maintenance and use of PPE, the training
of employees and monitoring of the program to ensure its ongoing effectiveness.
The required PPEs for the construction workers are,
 Head protection (safety helmets): The contractor must ensure that all those who are present
at a construction site are wearing helmets.

 Foot protection (safety footwear, gumboots etc.): Safety shoes are highly recommended for
all workers. Sneakers, sandals or canvas shoes are not to be permitted.
 Wearing Appeals: The contractor must ensure the supply of high visibility clothing, waist coat,
jacket, apron for the workers at the construction site. Employees whose work may bring them
into contact with fire or flames may wear clothing only made from natural fibres as an outer
layer.
 Personal fall protection (full body harness, rope-grip fall arrestor etc.)
 Eye and Face protection: It is required that all contract employees, sub-contractors, visitors
and delivery personnel in exposed areas wear eyeglasses as a minimum safety. More
specialised eye protection (goggles, welder's glasses) should be ensured by the contractor as
per the demands of the work being performed.
 Hand protection (gloves, finger coats, etc.): Wear work gloves when handling materials or
using tools, which may cause blisters, burns or cuts. Special gloves shall be worn when
handling hot materials, acids, alkalis and chemicals. Approved electrical gloves shall be worn
when handling energised cables or breakers racking in and out. The contractor shall have the
gloves tested on an annual basis to ensure their integrity.
 Respiratory protection: Respiratory protection like nose masks, ear muffs, etc. shall be used
when engineering controls are not adequate to protect employees from exposure to air
contaminants above the safe levels.
SAFETY MEASURES TO BE TAKEN DURING EXCAVATIONS

(A) An Open Excavation—Earth and Rock
Following are the main accident prevention measures, which should invariably be adopted, and
effectively carried out:
i. The sides of every excavation, where there is a danger of fall or dislodgement of earth, rock
or other material forming the side or adjacent to any excavation shall be securely supported
by adequately braced timber of suitable quality or other material unless the sides of the
excavation are sloping to a safe angle.
ii. In every excavation work along sloping ground, sides and slopes of excavation shall be
maintained in a safe condition by scaling, benching or barricading.
iii. On steep slopes, workers shall not be permitted to work one above the other.
iv. No excavation of earthwork below the level of any foundation of a building or structure shall
be commenced or continued unless adequate steps are taken to prevent danger to any
person from collapse of the structure or fall of any part thereof.
v. Additional precautions be taken to prevent slides, slip or caveings when excavations are made
in locations subject to vibrations from rail-road or highway traffic etc.
vi. In all trenches 1.5 m or more in depth, ladders should be provided.
vii. Excavation areas should be adequately lighted for night work.
viii. During hours of darkness all public sidewalks should be adequately illuminated and warning
lights about the excavation should be provided.
ix. A flagman should be posted to warn the public or approaching trucks and to direct the trucks
in and out of the site of excavation.
x. The side slopes and their stability should be carefully examined after every blasting operation.

xi. Every accessible part of an excavation pit or opening in the ground into which a person in
liable to fall, a suitable barrier should be provided.
xii. Measures should be taken to prevent workers and spectators from approaching the
dangerous areas.
(B) Tunnel and Shaft Excavation

i. Frequent careful inspection of tunnel walls and roof and thorough sealing or removal of loose
rock are necessary to prevent rock falls. Ample illumination, good housekeeping, and safe
walkways are important factors in the prevention of accidents.
ii. All persons working (or entering) in the tunnel should wear hard hats and hard toe shoes.
iii. In every shaft and tunnel, sufficient safe means of access should be provided.
iv. After every blasting operation, roof and walls of the tunnel and sides of the shaft should be
carefully inspected.
v. Motive power, other Chan electric should not be used. Every locomotive should have
headlights on each end. It should also be equipped with whistles or horn.
vi. The ventilation system should be adequate to maintain circulation of air in all parts of tunnels
and shafts.
vii. No inflammable materials or oil and grease should be stored inside or near the tunnel or shaft.
viii. All electric wiring shall be extra-heavy insulated and of sufficient capacity supported on
insulators and not looped on or tied to spikes or other makeshift supports.
ix. In case of shaft excavation, all sheaves should be of the proper diameter of the cable or hoist
rope and should be amply strong, properly mounted and frequently inspected. All hoisting
equipment including ropes and cables should be thoroughly inspected atleast once a weak
and maintained in a good condition.
x. Telephone system should be established in the tunnels and shafts.
Following safety precautions should be followed in case of gaseous tunnels :
a) Regular checking of methane gas by methane detector.
b) No entry of lighters, match boxes etc. inside by workers etc.
c) To detect carbon dioxide formation, safety lamps be provides.
d) Regular checking of gas at the faces should be done before each shift.
e) The gas percentage should be checked regularly.
f) Rescue apparatus shall be provided, and some personnel should be trained to handle
them.
g) Welding and cutting by gas should not be allowed inside the gaseous tunnel.
SAFETY MEASURES TO BE TAKEN DURING EXPLOSIVES, DRILLING AND BLASTING

1. All operations involved in transportation, handling, storage and use of explosives should be as per
Indian Explosive Act.
2. Explosive shall be handled by or under the supervision of competent and experience persons.
3. Transport and handling
Explosives should not be transported to the site of operation except in suitable cases or containers
which are so made as to prevent any spillage of explosives and any danger of sparks or other sources
of ignition during conveyance.

Following should be observed regarding vehicles used for transport :

a) Vehicles must have springs under the body.
b) Detonators and ignitors must not be carried in the same vehicle with explosives.
c) The vehicle carrying the explosives must not be used to transport workmen or other
materials.
d) Drivers should not leave the vehicle unattended.
e) All vehicles transporting explosives shall be marked or play carded on both sides and
ends with the word "EXPLOSIVES" in white letters not less than 75 mm tall on a red
background.
f) A motor vehicle carrying explosives should not be refuelled except in emergencies and
even then only when motor is stopped and other precautions taken to prevent
accidents. Such vehicles should invariably have at least two fire extinguishers placed
at convenient points.
g) Vehicles transporting explosive should never be taken to repair shop, or parked in
congested areas, or stored overnight.
h) Explosives should not be transported on a public highway during hours of darkness.
i) Persons employed in the transport or handling of explosives should not carry with
them or in the vehicles, matches, loaded fire arms, petrol etc.
j) Smoking should be prohibited during handling and transport of explosives.
k) Explosives should be protected against theft.
Vehicles used for transporting explosives should be care fully inspected daily to ensure that :
a) Filled and serviceable fire extinguishers are 'in position.
b) Electric wiring is well insulated and firm and secured.
c) Chassis, engine and body are clean and free from surplus oil and grease.
d) Fuel tank and feed lines are not leaking.
e) Lights, brakes and steering mechanism are in good working order.
f) Boxes of explosives should be handles carefully and not to be allowed to fall.
4. Storage
i. The magazine should be kept clean. High explosives like dynamite should be stored in a dry,
clean, well-ventilated, bullet-proof and fire-proof building constructed in accordance with
Indian Explosives Act, on an isolated well guarded place.
ii. Sufficient number of lightning conductors should be provided on top of the magazine.
iii. Separate magazine shoes, without nails, should be kept in the magazine and persons entering
the magazine must put on these magazine shoes.
iv. Light should be obtained from an electric storage battery lantern.
v. No person having articles of steel or iron be allowed to enter a magazine.
vi. Oily cotton rags, cotton waste and other articles liable to spontaneous ignition, should not be
taken into a magazine.
vii. Packages containing explosives should not be allowed to remain in the sun.
viii. Adequate fire fighting equipment shall be provided in the magazine.

5. Drilling
i. Holes should be of greater diameter than the diameter of the carteridges of explosives used.
ii. Loading and drilling should not be carried out at the same time in the same area.
iii. Drilling should not be resumed after blasts have been fired until a thorough examination has
been made to make sure that there are no exploded charges which the drills may strike.
6. Loading
i. Bore holes must be cleared of all debris before a cartridge is inserted.
ii. All loaded holes or charges shall be checked and definitely located before firing.
iii. Holes in the cartridges shall be made with a sharpened wooden stick. Detonators shall be
inserted only in a hole in the end of a cartridge prepared specially for that purpose.
iv. No welding shall be done inside the tunnel at the time of loading of the face, until the blast
has been taken.
v. After the loading of a blast is completed, all excess explosives and detonators should be
removed to a safe location.
7. Blasting
i. The charge should be fired successively and not simultaneously.
ii. Prior to the firing, all persons in the area should be warned of the blast and sent to a safe
distance.
iii. Flagmen with whistles should be posted to stop traffic at access points on each possible route
of travel. Blasting should be done at fixed hours and displaced on a Notice Board.
iv. A loud, warning signal shall be given at a proper time before firing a blast, and all clear signal
shall be given when the blasting is over.
v. After a blast has been fired and firing line is disconnected, a careful inspection should be made
by the blaster to determine if all charges have been exploded.
SAFETY MEASURES TO BE TAKEN DURING HOT BITUMINOUS WORKS

i. Workers engaged on jobs involving handling of hot bitumen, tar, and bituminous mixtures
shall use protective wears, such as boots, gloves, goggles and helmet.
ii. When heating and handling of hot bituminous materials is to be done in open, sufficient
stocks of clean dry sand or loose earth shall be made available at the work site to cope with
any resultant fires. When heating of bituminous materials is carried out in enclosed spaces,
sufficient number of properly maintained dry powder fire extinguisher or foam extinguisher
conforming to accepted standards shall be kept in readiness on the work site.
iii. Piping for hot tar and bitumen shall be adequately insulated to protect workers from injury
by burns.
iv. Workers shall not stand facing the wind directions while spraying hot binder, lest it may fall
on them causing burns.
v. Suitable indicator gauges shall be used to ascertain level and temperature of the material in
the boiler. Workers should not be allowed to peep into the boiler.

SCAFFOLDS
Scaffolds are provided for works that cannot be done from the ground or from part of a permanent
structure. Following safety measures should be adopted for scaffolds :
(i) Every scaffold including supports should be of good construction and of adequate
strength for the purpose for which it is used and it should be properly maintained. Boards
and planks used for the floors shall be of uniform thickness, butt jointed, closely laid, and
securely fastened in place.
(ii) (ii) In case of suspended scaffolds, supports should be of adequate length and strength.
Ropes, chains or other means of suspension should be of good construction, sound
material and of adequate strength and properly secured.
(iii) Persons should not be allowed to work from scaffold during storms or high winds.
(iv) Side screens should be provided on scaffolds erected along passage ways or other
thorough fares.
PLATFORMS
i. All working platforms, gangways and runs from which workers are liable to fall more than 2
meters should be of adequate width depending upon the type of work done, and provided
with suitable guard rails of adequate strength.
ii. Every platform, gangway, run or stairs should be kept free from any unnecessary obstruction,
material, rubbish etc.
iii. Each supporting member used in the construction of run-ways, platforms, ramps and
scaffolds should be securely fastened and braced. Supporting member should be placed on a
firm, rigid and smooth foundation of a nature that will prevent lateral displacement.
iv. Cantilever of scaffold planks should be avoided.
v. Where planks are butt jointed, two parallel putlogs must be used, giving each plank sufficient
support.
LADDERS
i. Ladder should be of good construction, sound material and adequate strength. No ladder with
defective or missing rung or with any rung which depends for its support solely on nails, spikes
etc. should be used.
ii. Wooden ladder should not be painted, as paint covers up the defects.
iii. Whenever platform is 1.5 m or more above the ground, a ladder or stairway should be
provided. Every ladder used for a vertical height of more than 9 meters should be provided
with an intermediate landing.
iv. The materials and tools should wherever practicable, be pulled up with a rope, and should
not be taken by ladders.
v. A ladder should not be placed upon a box, barrel or other movable insecure object. The
slipping of a ladder at either end should be carefully guarded against where the supporting
surfaces are smooth and vibrating.
FORM-WORK
Safety hazards in form-work construction are:
i. Poor house-keeping,

ii. Leaving materials and tools where they may fall and cause injuries,
iii. Tops of forms used as walkways not equipped with standard guardrails, and failure to
properly secure forms of scaffolds
iv. All forms or form panels that are to be used or reused should have U-bolts, sufficient in
number and size, to carry the weight of forms or form panels.
v. All form-raising operations should be conducted in a safe and orderly manner and only
experienced workers should be allowed on this type of work.
vi. All form raisers shall use safety belts when required to go over the side unless scaffolds are in
place on the form.
vii. 'A' frames should be designed and maintained to withstand all loads imposed upon them. All
head and tail jacks should be maintained in good working order. Tail jack fasteners of
sufficient length and size should be securely anchored in the concrete.
viii. All form stripping should be conducted in a safe and orderly manner and in accordance with
the rules for good housekeeping. All stripped lumber should be placed in piles or removed
immediately from the work area. All protruding nails or superfluous bolts or studs used to
fasten the shuttering should be cut or bent down soon after stripping.
ix. Boatswain's chairs, safety belts, and ropes should be used where workers are exposed to
falling hazards of stripping operations and should be protected from falling objects.
SAFETY CAMPAIGN
Lack of training has been identified as one of the major causes of accidents. Safety awareness is the
basic requirement for reducing accidents. Most of the accidents take place due to adoption of
shortcuts and/or ignoring the safety guidelines. There is a need to prepare 'project safety manual'
(PSM) which should include a set of minimum safety standards and guidelines which are expected to
be followed on any construction project. The manual should include the mandatory use of personal
protection equipment, safety awareness training programmes, fire protection, first-aid, safety
signage’s, accident reporting procedure.
Following are the main objects of safety programmes (also known as accident prevention
programme),
i. To reduce the human life sacrifice.
ii. To lessen the temporary and permanent injuries to workers.
iii. To reduce the time lost due to accident.
iv. To safeguard against loss of or damage to equipment and properties.
v. To control the expenses on workmen's compensation.
Safety programme should be made an integrated part of the operations of each construction
company. An effective programme should be developed to suit the particular operations such as
excavation, pile driving, drilling and blasting, tunnelling etc. Each operation has its own hazards and
a safety programme should be developed to suit the particular hazards.
Safety programme in construction industry, must receive the full support of an entire organisation,
beginning with top management and continuing down through the ranks to include the project
managers, supervisors and workers.

In any safety programme, following are essential:

1. Secure full support of top management.
2. Designate one person in the organisation to direct safety programmes.
3. Give publicity to the safety programs.
4. Develop a safety programme for each job.
5. Install safety programme, creating the competition with appropriate rewards for outstanding
performance.
6. Train new employees with the safety programmes.
7. Safety practice be made effective.
8. Promote good house-keeping.
9. Maintain adequate first-aid facilities.
10. Seek assistance from insurance companies.
SAFETY INSURANCE
Insurance laws are applicable only to regular employees. In construction industry most of the labour
is of casual nature and insurance laws are not applicable to them. For the welfare of casual labour,
different acts such as minimum wage act, compensation act etc are passed by the government.
Keeping in mind the intensity of a probable lossin case of mishaps/ accident in engineering works,
construction activities, different insurance covers are available. Owing the huge monetary and other
losses in case of accidents/ loss of lives in construction industry, any uninsured activity or job may
culminate into job termination. To mitigate these kinds of uncertainties or unforeseen events an
insurance cover is normally taken.
Following are some relevant schemes or engineering project works,
 Contractors All Risk Insurance (CAR Policy)
 Machinery Breakdown Insurance
 Loss of Profit Insurance following machinery breakdown
 Contractor’s Plant and Machinery (CPM) Insurance
CONTRACTORS ALL RISK INSURANCE (CAR POLIICY)

This is a comprehensive insurance cover and provides adequate protection against loss of damages
in respect of contract works, as well as third party claims towards property damage or badly injured
workman/ general public. The insurance covers on all risk encompasses any sudden and unforeseen
loss or damage occurring to the property insured. The following items get covered in a CAR policy
under normal circumstances,
 Fire accidents, lighting and explosives
 Theft, burglary
 Bad workmanship, unintentional negligence, human errors
 Natural calamities
Unless otherwise specified, the following are not included in the CAR policy,
 Loss or damage due to war or war like operations, strike, riots
 Loss or damage due to wilful negligence
 Loss due to nuclear reactions, radiations, radioactive contamination

MACHINERY BREAKDOWN INSURANCE

Breakdown cover is offered to all types of installed machineries working in fixed premises. The cover
can be extended in special cases to mobile construction machineries such as bull dozers, derrick
cranes, tractors, mobile compressors etc. the cover can also be extended to include damage to third
party as well as personal injuries arising out of any breakdown of the insured machinery.
LOSS OF PROFIT INSURANCE FOLLOWING MACHINERY BREAKDOWN

Sometimes when a small but vital part of a machine fails, entire work comes to a standstill. In these
circumstances this insurance policy covers the consequential losses that may be suffered by the
machine user following a breakdown. The policy may be for full machine or part thereof and it may
be for a period varying 3 – 12 months. This policy covers the actual losses suffered by the insured due
to the business interruption leading to reduction in turnover and increase in cost of working, resulting
in the loss of gross profit due to breakdown.
CONTRACTOR’S PLANT AND MACHINERY (CPM) INSURANCE

Construction machinery/ equipment’s are now a days insured under the Contractor’s Plant and
Machinery (CPM) Insurance policy, which is an annual policy, providing insurance coverage against
loss/damage due to,
 Overturning
 Acts of God
 Riots, strikes and malicious damage
 Theft/burglary
This insurance policy do not provide coverage against loss/damage arising due to ,
 Electrical or mechanical breakdown
 Normal wear and tear
 While being tested
 While working underground
 War or nuclear reaction
 Wilful negligence
The coverage under this policy can also be extended for third party liabilities and owners surrounding
property

ETHICS
MORAL
Morals are the standards, norms and principles for right and wrong concepts. They are standards that
help to guide our behaviour. The issues relate to these standards are based on science and logic. In
other words these are scientific standards developed by the society.
Morality
The word morality is derived from the Latin word “mores”, meaning custom, habit, and way Of life.
It typically describes what is good, right, or proper.
VALUES
The sense of value is an essential attribute of the human consciousness. The word 'value' expresses
the qualitative significance we assign to ideas, feeling, activities and experiences. Value are the
evaluative standards we use for deciding what is right and what is wrong, what is good and what is
bad, what is desirable and what is undesirable? The quality of living space we create for ourselves is
determined by our system of value. Values are the rules by which we make decisions about right and
wrong, should or shouldn't, and good or bad.
 Values mean an in-built mechanism that distinguishes the right from the wrong. This should
be interpreted in the context of the social environment in which an person lives, moves and
rests.
 Values are the essence of life. Values are like the building blocks which are used to form a
firm structure. The building blocks are set into position by several workers to construct a
building. In the same way, the values inherited from family, society, environment, culture and
other influencing factors, if rightly placed and then they rise up a firm individual.
 Values serve the process of 'becoming', in the sense of transformation of the level of
consciousness to purer, higher levels. Values are subjective while skills are objective.
 Values provide us with a unique, personal and moral template that we use subconsciously to
assess and judge the intentions and actions of others and ourselves, and the importance of
the likely outcome of various actions and reactions.
 Values are something we qualify as 'good' and are prepared to set as our goals in life, The
concept of values describes that part of our goals which is not immediately necessary for
survival. When two different goals come into conflict, we call for a higher goal or a value which
we choose to resolve the conflict.
 A value is defined as "a principle that promotes well-being or prevents harm."
 Values are the scales we use to weigh our choices for our actions, whether to move towards
or away from something.
Sources of values
There are many sources of values,
 Parents and family
 Teachers and classmates
 Peer groups and friends
 Reference groups
 Culture and tradition

HUMAN VALUES
Human values are the values for the human beings and by the human beings. Morals and values are
the foundation of human values. Just as a building has a foundation of concrete, the building of
human values rests on morals and values. Human values can also be defined as values of life. The
human values evolve because of the following factors:
1. The impact of norms of the society on the fulfilment of the individual's needs or desires.
2. Developed or modified by one's own awareness, choice, and judgment in fulfilling the needs.
3. By the teachings and practice of Preceptors (Gurus) or Saviours or religious leaders.
4. Fostered or modified by social leaders, rulers of kingdom, and by law (government).
Core human values
There are five core human values. They contain all that makes a human being noble, caring and kind.
 Truth
 Love
 Peace
 Right conduct
 Non-violence
TRUTH – Truth is an indispensable ethical discipline, which should be regarded as a social obligation
and a necessity. Truth helps us to build a healthy environment and society. It is one of the driving
force of human existence.
Values related to truth are: Accuracy, curiosity, discernment, fairness, fearlessness, honesty, integrity
(unity of thought, and deed), intuition, justice, optimism, purity, quest for knowledge, reason, self-
analysis, and sincerity, sprit of enquiry, synthesis, trust, truthfulness and determination.
LOVE – Love is a spontaneous reaction of the heart. Love is the form of energy which affects all forms
of life. It is a positive force which each individual transmits and receives.
Values related to love are: Acceptance, affection, care, compassion, consideration, dedication,
devotion, empathy, forbearance, forgiveness, friendship, generosity, gentleness, humanness,
interdependence, kindness, patience, patriotism, reverence, sacrifice, selflessness, service, sharing,
sympathy, thoughtfulness, tolerance and trust.
PEACE – Peace is always there, inherent in all of us. We just need to find the way to access it. Learning
to control the mind is the secret behind it. Whether a person makes right decisions or wrong, the
main motive is to achieve peace and happiness. A person experiences peace if only he has emotional
equilibrium.
Values related to peace are: Attention, calmness, concentration, contentment, dignity, discipline,
equality, equanimity, faithfulness, focus, gratitude, happiness, harmony, humility, inner silence,
optimism, patience, reflection, satisfaction, self-acceptance, self-confidence, self-control, self-
discipline, self-esteem, self-respect, sense control, tolerance and understanding.
RIGHT CONDUCT – Right conduct is concerned with maintenance of the body to serve us in
performing the tasks of life. Right conduct depicts our personality and the values inherited by us.
Values related to right conduct are:
 Self-Help Skills: Care of possessions, diet, hygiene, modesty, posture, self-reliance and tidy
appearance.

 Social Skills: Good behaviour, good manners, good relationships, helpfulness, no wastage and
good environment.
 Ethical Skills: Code of conduct, courage, dependability, duty, efficiency, ingenuity, initiative,
perseverance, punctuality, resourcefulness, respect for all and responsibility.
NON-VIOLENCE – Non-violence can be described as a universal love. This creates harmony with
environment i.e. living in a way that causes as little harm as possible to one-self, other people,
animals, plants is a sign of a well-integrated and well-balanced personality.
Values related to non-violence are:
 Psychological: Benevolence, compassion, concern for others, consideration, forbearance,
forgiveness, manners, happiness, loyalty, morality and universal love.
 Social: Appreciation of other cultures and religions, brotherhood, care of environment,
citizenship, equality, harmlessness, national awareness, perseverance, respect for property
and social justice.
Types of human values

Two main types of human values are,
1. Terminal values: Values which a person wishes to achieve during his or her life time.
2. Instrumental values: These are the means to achieve one's terminal values. Values can
positive as well as negative.
ETHICS
The branch of philosophy that defines what is good for the individual and for society and establishes
the nature of obligations or duties, that people owe themselves and one another. It involves defining,
analysing, evaluating and resolving moral problems and developing moral criteria to guide human
behaviour. It consists of rules or standards governing the conduct of a person or the conduct of the
members of a profession.
Ethical value: A belief of principle rooted in moral behaviour, based on the sense of what is right.
Unethical value: A belief of principle rooted in immoral or a moral behaviour, based on a sense of
what is wrong or at least of consciously disregarding what is right.
No ethical value: A belief or preference that is not related to right and wrong. The study of morality
involves questions of practical reasoning, such as freedom, privacy, equality, duty, obligations and
choice, as well as the justification of judgments, rights, and claims related to these terms. In general,
ethics is related to the code or set of principles, standards or rules that guide the moral actions of an
individual within a particular social framework. It is concerned with moral judgment and moral
decision, involving questions about human behaviour or conduct—how a person ought to act
responsibly in a particular case and to what extent this action should be described as right or wrong.
SIGNIFICANCE OF ETHICS
The following are the significance of ethics,
 Ethics correspond to basic human needs. These basic ethical needs compel the organizations
and corporations to be ethically oriented.
 Ethics Set/Establish moral standards/norms of behaviour.

 Ethics Suggest moral behaviour, prescribes recommendations about Do's & Don'ts.
 Ethics create credibility and image for the corporations with the public.
 Ethics improve the employee morale and enhance the credibility of the management with the
employees.
 Ethics help in better decision making.
 Ethics improve the overall profits of the company.
 Ethics protect the society and environment more than the law.
Comparison between Ethics and Morality
Sl No ETHICS MORALITY
The term ethics is rooted in the Greek “ethos”, The word morality derives from the Latin
1
meaning custom or common practice “mores”, meaning habit or way of life
The rules of conduct recognized in respect to Principles or habits with respect to right
a particular class of human actions or a or wrong conduct. It defines hoe things
2
particular group, culture etc. It defines how should work according to an individual’s
things are according to the rules. ideals and principles.
3 Refers only to professional behaviour Refers only to personal behaviour
Ethics referring to the examination, Morality referring to the values and
4 justification and critical analysis of the beliefs about what is right and wrong,
morality. good and bad, just and unjust.
Ethics is generally uniform Morals may vary from society to society
5
and culture to culture
Thrust is on influence, education, training Thrust is on judgement and punishment
6
through codes, guidelines and correction in the name of god or by laws.
PROFESSIONAL ETHICS
Professional ethics is a set of standards adapted by professionals in so far as they see themselves
acting as professionals. Professional ethics is not of recent origin. It got more attention recently
because of the social responsibility movement that started in 1960s. Professional ethics often involve
choices on an organizational level rather than a personal level. Professional ethics is necessary to
reveal, sustain and enhance certain basic human values. These values are kindness, care and
compassion, trust and reliability, truthfulness and honesty, justice and fairness, performance of a
duty for the benefit of others, non-violence and non-injury and accountability and social
responsibility.
Professional ethics is a codified formal system or set of rules, which are explicitly adopted by a group
of people. It encompasses how professionals should behave in their professional work and how they
conduct themselves.
The main characteristics of a professional ethics are,
i. Professional ethics is based on certain ethical values and norms which a professional is
supposed to follow.
ii. Professional ethics speaks about managing values and conflicts among professionals.
iii. Most of the ethical dilemmas laced by managers in the workplace are highly complex.
Professional ethics gives a programmatic approach to solve ethical problems.
iv. The value of code of ethics to an organisation is its priority and focus regarding certain ethical
values in that workplace. Managing ethics in the workplace includes everyone working as a
team to help each other and remain ethical at work.

v. Profit maximization, expanding market share, etc. can be very strong influences on morality.
Laws, regulations and rules influence behaviours to be more ethical.
INTEGRITY
Integrity is one of the core qualities that any professional practitioners should possess. It also refers
to honesty and open mindedness either with oneself or others. Mostly integrity involves the
discovery of truth and it's communication, In specific terms, integrity refers to the capacity to
communicate the truth in proper manner so, that it enables the client and others to make informed
decisions. Integrity as well as honesty are very vital for the development of trust, Integrity plays its
important role in different situations and contexts, in order to lead to the consistency of character
and operation. A good test of this is not just constant operation in different contexts but also how
the individual functions where there is nobody around, testing the consistency and truth against
personal attributes.
Integrity is one of the self-direction virtues on commitment and on putting understanding to action.
Moral integrity refers to the unity, which is a consistency among human attitudes, emotions and
conduct in relation to justified moral values. Thus, integrity acts as a link between responsibility in
private and public life.
With the help of the integrity, the virtues of self-respect and pride in the job can be made possible.
 It prevents the attitude among the individuals that they are not responsible for their wrong
doings in the job. It creates an enthusiasm among the individuals for achieving excellent
performance in their job and also makes them to ensure that the job is done well.
 Maintaining integrity is somewhat difficult and complicated because a few jobs are designed
to have a perfect mesh between personal ideals and work activities of some one.
 Maintaining or practicing integrity needs courage. This courage is obtained when wisdom and
integrity join hands.
 This value will help the engineers to gain confidence from management and help him to move
up the ladder. All the organizations are looking for this value in employees.
The integrity of the engineers is most essential in the following works:

i) Engineering research and testing
ii) In the use of intellectual property
iii) Client professional confidentiality
iv) Expert testimonials
v) Failure to inform the public
WORK ETHICS
Work ethic is a set of values based on hard work and diligence. It is also a belief in the moral benefit
of work and its ability to enhance character. A work ethic may include being reliable, having initiative
or pursuing new skills or maintaining social skills.
In general, employees need some jobs and wages, but they also desire to be treated humanely with
dignity. Moreover, they look for a workplace which is safe and healthy, that respects their privacy,
and provides meaningful work, and offers some security during retirement periods.
There are six fundamental social challenges that face modern business. They are the need to achieve
ecological balance, the human element in work, improving economic and social productivity, global

pressures, demands and needs, balancing ethics and economics in business decision making, and to
help in designing social partnerships for resolving society's major problems.
Workers exhibiting a good work ethic in theory should be selected for better positions, more
responsibility and ultimately promotion. Workers who fail to exhibit a good work ethic may be
regarded as failing to provide fair value for the wage the employer is paying them and should not be
promoted or placed in positions of greater responsibility. Work ethic is not just hard work but also a
set of accompanying virtues, whose crucial role in the development and sustaining of free markets.
The philosophy of work ethics is more popular among professional workers including doctor,
professors, engineers and accountants as they get positive returns out of that and corporate
governance promotes this type of work culture. Work ethics are laid down by the organization to
bring uniformity in the behaviour of workers and managers. A good work ethic creates a work culture
in the organization and increases the productivity. This value helps the engineer to work hard,
discipline and build team in an organization.
FACTORS AFFECTING A STRONG WORK ETHIC

The following are the factors which affect work ethics,
 Integrity: Integrity stretches to all aspects of an employee's job.
 Sense of Responsibility: A strong sense of responsibility affects how an employee works and
the amount of work he does.
 Emphasis on Quality: Some employees do only the bare minimum, just enough to keep their
job intact. The employee's commitment to quality improves the company's overall quality.
 Discipline: It takes a certain level of commitment to finish your tasks every day. An employee
with good discipline stays focused on his goals and is determined to complete his
assignments.
 Sense of Teamwork: An employee with a high sense of teamwork helps a team meet its goals
and deliver quality work.
BENEFITS OF ETHICS AT WORK PLACE

Ethics at work place brings discipline and order. It improves and strengthens relationships amongst
superiors, peers and subordinates. It enhances commitment and accountability of the top managers
and ensures safety of interest of its various stakeholders.
Ethics programmes support employee growth and also the more emotionally healthy executives are
higher on ethics work.
Work ethics promotes team work and productivity as employees feel strong alignment between their
values and those of the organisation.
Ethics programmes help avoid criminal acts of omission and lower penalties.
Ethics at work place helps manage values associated with quality management, strategic planning
and diversity management. TQM includes high priority on certain operating values.
e.g. trust among employees, customers, performance reliability, measurement and feedback.
Ethics programmes help ensure that legal course of action is adopted in procedures. Personnel
policies to ensure ethical treatment of employees.
Ethics programmes promote a strong public image as employees operate with integrity and self-
respect. Ethical values build socially responsible business and commercially successful.

Ethics at work place helps employees to maintain a moral course in turbulent times as they
continuously pay attention to ethics consistently.
Managing ethical values in the work place legitimize managerial actions, strengthens the
organisation's culture, improves trust in relationships between individuals and groups, supports
greater consistency in standards and qualities of products, and cultivates greater sensitivity to the
enterprise's values and messages.
UNETHICAL BEHAVIOUR OF EMPLOYEES

Employees may behave unethically due to the following reasons,
I. Pressure from the government to complete the project in time (e.g., before the elections)
II. Reduction in the budget because of sudden war or natural calamity (e.g., Tsunami,
earthquake)
III. An inferior material may be used under pressure of time or budget
IV. Obsolescence due technology innovation by the competitor leads to manipulation and unsafe
and unethical execution of projects
V. Product's ultimate harmful effects may not be foreseen
VI. Involving individuals in the development of goals and values and developing policies that
allow for individual diversity, dissent, and input to decision-making will prevent unethical
results
VII. Double standards or behaviour of the employers towards the employees and the public
VIII. Management projecting their own interests more than that of their employees
IX. Emphasis on results and gains at the expense of the employees
X. Management by objectives, without focus on empowerment and improvement of the
infrastructure
XI. Low morale of the employees because of dissatisfaction and downsizing
XII. Lack of promotion or career development policies or denied promotions
XIII. Lack of transparency in organisation
XIV. Absence of recognition and reward system
XV. Poor working environments
XVI. Employees are tempted of bribes and corruption
ENGINEERING ETHICS
Engineering ethics is the rules and standards governing the conduct of engineers and applies more
specifically to situations involving engineers in their professional lives. Engineering ethics is defined
as, “The study of the moral issues and decisions confronting individuals and organizations engaged
in engineering”.
Engineering ethics can also be is defined as: “The study related problems about the moral ideals,
character, policies and the relationships of people and corporations involved in technical activities”.
Engineering ethics is applied not only to the decisions taken by the engineers, but also to the
technological enterprises, scientists, managers, production workers, supervisors, technicians,
technical writers, sales staff, Government officials, elected representatives, lawyers, doctors and
even to the general public. The code and conduct of engineering ethics is not only part and parcel of
engineers who are working in industries and also very much essential for other related fields like,

 Public Safety
 Bribery and Fraud
 Environmental Protection
 Fairness
 Honesty in Research
 Testing Conflicts of Interest
OBJECTIVES OF ENGINEERING ETHICS

 To understand the moral values that ought to guide the Engineering profession and resolve
the moral issues in the profession.
 To justify the moral judgment concerning the profession. It is intended to develop a set of
beliefs, attitudes, and habits that engineers should display concerning morality.
 To increase one's ability to deal effectively with moral complexity in engineering practice.
Comparison between general ethics and engineering ethics

Sl No GENERAL ETHICS ENGINEERING ETHICS
Ethics is an activity which concerns with Like ethics, engineering ethics also aims at
making investigations and knowing about knowing moral values related to engineering,
1 moral values, finding solutions to moral finding accurate solutions to the moral
issues and justifying moral judgements problems in engineering and justifying moral
judgements of engineering
Ethics is a means of contrasting moral Engineering ethics gives total view of the
2 questions from non-moral problems. moral problems and how to solve those issues
specifically related to engineering field.
Ethics is also used as a means of Engineering ethics is also using some
describing the beliefs, attitudes and a currently accepted codes and standards
3
habit related to an individual’s or group’s which are to be followed by the group of
morality. engineers and engineering societies.
As per the definitions of dictionaries – Engineering ethics also concerns with
‘moral principles’ is about the actions and discovering moral principles such as
4
principles of conduct of the people i.e. obligation, rights and ideas in engineering and
ethical or unethical. by applying them to take a correct decision.
DUTIES
Duties are moral obligations. The main duties that a person should perform are,
 Respect for truth
 Respect for laws
 Respect for society and the state
 Respect for life
 Respect for freedom and personality
There are generally three classes of duties,

Duties to self – health, self-development, capability expansion, etc.
Duties to others – duties to family and friends, relatives, neighbours, society, humanity, animals and
plants and the country
Duties to God – devotion, prayer, meditation, worship, communication and love for God

RIGHT
Right is the entitlement or empowerment to do certain things. Rights are moral claims of individuals
recognized by the society. There are many types of rights like, legal, constitutional, fundamental and
moral. Right gives us the liberty and choice and empowerment. There are many basic rights given to
every citizen of a country. These rights include life and security, education, freedom of speech,
employment, express opinion, legal remedies, contractual right, equality and human rights. Rights
are based on several sources of authority. Moral rights give individuals the 'freedom to pursue one's
own interest so long as the interests of others are not violated. Moral rights need to be justified and
they are necessary for self-realization. These rights are essential for the highest personal good and
social benefits.
PROFESSION
Profession means a job or an occupation. Profession is defined as any occupation/job that requires
advanced expertise (skills and knowledge), self-regulation and concerted service to the public good.
It brings a high status, socially and economically, for example, engineering, medicine, law, education,
servicing, administration or corporate governance etc.
PROFESSIONAL
A professional is someone who is member of a profession or someone who is practicing a profession.
Professional relates to a person or any work that a person does on profession and which requires
expertise (skills and knowledge), self-regulation and results in public good. The term professional
means a 'person' as well as a 'status'.
PROFESSIONALISM
Professionalism means employed engineers as professionals having obligations to both employers
and the public. Professionalism also mean as services to some important aspects of the public good.
PROFESSIONAL DUTIES TO BE PLAYED BY AN ENGINEER

Engineers must practice their professions to promote public health, safety and welfare. But there are
many roles to be played by an engineer while contributing to public good. Some of the models or
roles are as follows,
 Saviour: It is the generally believed technology and engineers hold the key for any
improvement in society. The engineer as a saviour, save the society form poverty, illiteracy,
wastage, inefficiency, ill health, human dignity and lead it to prosperity, through technological
development and social planning.
 Guardian: He guards the interests of the poor and general public. He knows the direction in
which technology should improve and the speed at which it should move.
 Bureaucrat: He holds huge corporations in managerial positions playing the dual role of
employer and employee, and manages and applies his knowledge and resources for the
society's benefit.
 Social servant: Any engineer should keep in mind that the society is his real master. He has
the task of fulfilling society's requirements through all his actions.
 Social enabler and catalyst: The engineer's role does not stop with merely carrying out
instructions. He anticipates changes in society's requirements and takes timely action to meet

those needs. Sometimes, he even causes the change or provokes the change and takes the
society to the next generation of technology.
 Game player: This means the game of Economics. Through their actions of production,
distribution, innovation and consumption, engineers play the rules of economics. In fact, any
country's economic progress is determined by the quality of its engineers.
INDIVIDUAL/ HUMAN RIGHTS

These should be possessed by engineers by virtue of being people or moral agents. These rights
include the basic rights to pursue legitimate personal interests, right to make a living and right to
privacy.
PROFESSIONAL RIGHTS
These rights are possessed by virtue of being professionals having special moral responsibilities.
Examples of such rights are:
i) Right to form and express professional judgment without any obstacles.
ii) Right to deny participating in unethical activities.
iii) Right to express professional judgment, including the right to disagree.
iv) Right to warn the public about dangers.
v) Right to fair recognition and remuneration for services.
vi) Right to talk freely about the work.
vii) Right to get involved in the activities of professional societies.
CONFIDENTIAL INFORMATION
Confidential information is the information, which is desirable to keep secret in a government
department or a private company. Engineers and the employees are expected to keep information
'Confidential". Keeping confidence or confidentiality is the most important duty of any professional.
Confidentiality is an ethical principle associated with several professions. Lawyers must keep clients
information confidential. Doctors must keep information about their patients confidential. Teachers
must keep personal information about their students confidential. Similarly, employed engineers
must keep information about their companies and clients confidential. They are expected not to leak
out any confidential information to unauthorized people both inside and outside the company.
PROPRIETARY INFORMATION
Proprietary Information is an information that a company owns. It is the information owned by the
proprietor in a legal sense. This means "property" or "ownership". This is primarily used in legal sense.
Also called Trade Secret. A trade secret can be virtually any type of information that has not become
public and which an employer has taken steps to keep secret. It may be data about designs and
technical processes and so on.
CONFLICTS OF INTEREST
Conflicts of interest are the situations where professionals have self-interest. If self-interest is given
importance, it may keep them away from meeting their obligations to their employers or clients i.e.,
a conflict of interest occurs when the employee has more than one interest.

A conflict of interests occurs when the independent judgment of a person is swayed, or might be
swayed, from making decisions in the best interest of others who are relying on that judgment.
For example, a student of below average intelligence setting the goals of getting A's in all his courses
while working a full time job and playing sports. Individuals can set goals that conflict with the goals
of other individuals. For example, a burglar's goal of stealing gold jewellery is in conflict with the
owner's goal of keeping it.
Types of Conflicts of Interest,

 Actual conflict of interest
 Potential conflicts of Interest
 Apparent conflict of Interest
 Interest in other companies
 Moonlighting
 Insider information
 Actual conflict of interest

It is based on weaker judgment and service. It refers to the loss of objectivity in decision-making and
inability to faithfully discharge professional duties to employer: For example, an engineer may have
financial interest or returns in the company, the suitability of which he has to judge for procurement
of materials or any specific contract as the case may be.
 Potential conflicts of Interest

There are situations where the interest of an employee extends beyond the current employer and
into the interest on one's spouse, relative or friend.
 Apparent conflict of Interest

Apparent conflict of interest may occur, when an engineer is paid based on a percentage of the cost
of the design and there is no incentive for him to cut costs. In this situation, it appears that the
engineer is making the design more expensive in order to make a large commission for himself.
 Interest in other companies

This kind of conflict of interest consists of having an interest in the business of a competitor or a sub-
contractor. For example, working as an employee or consultant for the competitor or subcontractor,
and partial ownership or large stock holding in the business of competitors.
 Moonlighting
It deals with a person who is working in two companies. This will break the rights, to pursue a person's
self-interest. Moonlighting will produce the conflict of interests only when a person is working for
competition, suppliers or even customers. Another effect of moonlighting is that it leaves the person
exhausted and harms the job performance in both places.
 Insider information
It is a kind of sensitive conflict of interest, which consists of using "inside" information to make an
advantage or to start a new business opportunity for oneself, one's family or one's friends. The
information may be of a person's own company or another company with which he does business.

BRIBE
A bribe is a substantial amount of money or goods offered beyond a stated business contract with
the aim of winning an advantage in gaining or keeping the contract, and where the advantage is illegal
or otherwise unethical. Bribes are illegal or immoral because they are substantial enough to threaten
fairness in competitive situations. Here 'substantial' means that which is sufficient to distort the
judgment of a typical person.
Bribes are generally given in secret. Since bribes can bias judgments, companies give elaborate
guidelines for their employees, illustrating acceptable and unacceptable gifts. But in some companies
officials are prohibited by law from accepting anything of value.
GIFTS
Gifts are not bribes as long as they are small gratuities offered in the normal conduct of business. A
gift one believes is given in friendship rather than for influence. Often companies give gifts to
employees of government agencies or partners in trade. Many such gifts are unobjectionable.
Engineers should not accept money directly or indirectly from contractors, or their agents in
connection with the work. This is one of the guidelines. If one receives any gifts, which will cause an
embarrassing consequence for the company when made public, then the gift is considered-as a bribe.
Entertainment, travel and other social functions give rise to special difficulties. Many companies
encourage their employers to form social relationships with the suppliers and the clients, in order to
enhance their business interest. This is also another form of bribery.
Comparison between Bribe and Gift

SL NO BRIBE GIFT
1 Given before Given after
2 Large amount Small amount (articles of daily use)
3 Usually poor quality of product May be good or high quality
4 Given in secret Given in open
5 Expect undue favour Expect a favour or thanking for the favour
6 Damages the goodwill and reputation of No damage is involved to organisation
the organisation
WHISTLE BLOWING
A Whistle-blower is a person who exposes any kind of information or activity that is deemed illegal,
unethical, or not correct within an organization that is either private or public. The term whistle
blower comes from the whistle a referee uses to indicate an illegal or foul play.
Exposing misconduct, illegal, or dishonest activity is a big fear for public employees because they feel
they are going against their government and country. These laws were enacted to help prevent
corruption and encourage people to expose misconduct, illegal, or dishonest activity for the good of
society. Whistleblowing is truly an entirely ethical decision, and action.
The reasons for whistleblowing may be:
 Violation of company policy/rules, law, regulation
 Threat to public interest
 Threat to national security
 Fraud and corruption

Types of whistle blowing

Whistle blowing is broadly classified into two types: Internal whistle blowing and External whistle
blowing.
 Internal Whistle blowing

Internally, a whistle blower can bring his/her accusations to the attention of other people within the
accused organization. Individuals who expose information regarding wrongdoing, fraud, corruption
or mismanagement and report such acts inside an organization i.e. to the Chief executive officer or
any member of the senior management are called as internal whistle blowers.
Most whistle blowers are internal whistle blowers, who report misconduct on a fellow employee or
superior within their company. One of the most interesting questions with respect to internal whistle
blowers is why and under what circumstances do people either act on the spot to stop illegal and
otherwise unacceptable behaviour or report it. There are some reasons to believe that people are
more likely to take action with respect to unacceptable behaviour, within an organization, if there
are complaint systems.
 External Whistle blowing

Individuals who report of such wrongdoings or misconduct outside of the organisation i.e. to the
media, law enforcement agencies, etc. are called as external whistle blowers. Externally, a Whistle
blower can bring allegations to light by contacting a third party outside of an accused organization.
Whistle blowers can reach out to the media, government, law enforcement, or those who are
concerned.
In these cases, depending on the information's severity and nature, whistle blowers may report the
misconduct to lawyers, the media, law enforcement or watchdog agencies, or other local, state or
federal agencies.
Individual harm, public trust damage, and a threat of national security are three categories of harm
that may come to whistle blowers. Revealing whistle blower identities automatically puts life in
harm's way. They face stiff reprisal and retaliation from those who are accused or alleged of
wrongdoing.

MODULE 4: INTRODUCTION TO ENGINEERING ECONOMY
ECONOMICS
The word “Economics” has been derived from two Greek words, Oikus means “household” and
Nemein means “management”.
Economics is a social science concerned with the production, distribution and consumption of goods
and services. It studies how individuals, businesses, governments and nations make choices on
allocating resources to satisfy their wants and needs, and tries to determine how these groups should
organize and coordinate efforts to achieve maximum output.
The goals of the economics are,
 A high level of employment
 Price stability
 Efficiency
 An equitable distribution of income
 Growth
The principle (and problem) of economics is that human beings occupy a world of unlimited wants
and limited means. For this reason, the concepts of efficiency and productivity are held paramount.
Increased productivity and a more efficient use of resources, leads to a higher standard of living.
TYPES OF ECONOMICS
The Economics is broadly classified into two types,
 Micro – Economics
 Macro – Economics
Microeconomics – it focuses on how individual consumers and producers make their decisions. This
includes a single person, a household, a business or a governmental organization. Microeconomics
ranges from how these individuals trade with one another to how prices are affected by the supply
and demand of goods. Also the efficiency and costs associated with producing goods and services,
how labour is divided and allocated, uncertainty, risk, and strategic game theory studied are.
Goals of Microeconomics include,
 Efficiency – efficiency is achieved when society is able to obtain the greatest amount of
satisfaction from the available resources.
 Equity – equity is achieved when income and wealth are fairly distributed within a society.
Macroeconomics – it studies the overall economy. This can include a distinct geographical region, a
country, a continent or even the whole world. Topics studied include government fiscal and monetary
policy, unemployment rates, growth as reflected by changes in the Gross Domestic Product (GDP)
and business cycles that result in expansion, booms, recessions and depressions.

Goals of macroeconomics includes

 Full employment – dull employment is achieved when all available resources (labour, capital,
land and entrepreneurship) are used to produce goods and services.
 Stability – stability is achieved by avoiding or limiting fluctuation in production, employment
and prices.
 Economic Growth – economic growth is achieved by increasing the economy’s ability to
produce goods and services.
COMPARISON BETWEEN MACROECONOMICS AND MICROECONOMICS

Sl No BASIS MICRO ECONOMICS MACRO ECONOMICS
It is the study of particular firm, It is concerned with aggregate
particular household, individual volume of the output of an
price, wage, income, industry and economy with the extent to which
1 Definition
particular commodity. its resources are employed, with
the size of national income and with
the general price level.
Optimum allocations of resources. Full employment and development
2 Objectives
of economic resources.
Demand Consumer's expectations and the Household's expectations and the
3
depends price of the particular product. price of the all products.
Supply Expectations of profits by firms and Producer's expectations and total
4
depends the price of the good or services. productions costs.
Nature of It is based on disaggregation. It is based on aggregation.
5
activity
It is assumed that there is full It is assumed that the allocation of
6 Assumptions
employment. resources is constant.
Equilibrium occurs when the quantity Equilibrium in an economy occurs
7 Equilibrium price demanded equals the quantity when the aggregate demand equals
supplied. the aggregate supply.
There is a price for each good or There is a price level in an economy
8 Price service that will clear the market. at which the aggregate demand will
equal aggregate supply.
ENGINEERING ECONOMICS
Engineering economics deals with the methods that enable one to make economic decisions towards
evaluation of design and engineering alternatives. It helps in examining the relevancy of a project,
estimating its value and justifying it from the engineering viewpoint. Engineering economics provides
methods that enable one to take economic decisions towards minimizing costs and/or maximizing
benefits to business organizations.
Engineering economy can be defined as a collection of mathematical techniques that simplify
economic comparison.
Engineers use the knowledge of engineering economy in performing analysis, synthesizing and
drawing conclusions as they work on projects of all sizes. In other words, the techniques and models
of engineering economy assist engineers in making decisions. The success of engineering and

business projects is normally measured in terms of financial efficiency. A project will be able to
achieve maximum financial efficiency when it is properly planned and operated with respect to its
technical, social, and financial requirements. Since engineers understand the technical requirements
of a project, they can combine the technical details of the project and the knowledge of engineering
economy to perform economy study to arrive at a sound managerial decision.
PRINCIPLE’S OF ENGINEERING ECONOMY

The development, study and application of any methodology must begin with a basic foundation. The
foundation for engineering economy is a set of principles or fundamental concepts, that provide a
sound basics for development of the methodology.
The following are seven principles of Engineering Economics.
Principle 1 : Develop the alternatives
The choice (decision) is among the alternatives. The alternatives are to be identified and then defined
for subsequent analysis. A decision situation involves making a choice among two or more
alternatives. Developing and defining the alternatives for direct evaluation is important because of
the resulting impact on the quality of the decision. Engineers and managers should place a high
priority on these responsibilities.
Principle 2: Focus on the differences
Only the difference in the expected future outcomes among the alternatives is relevant to the
comparison and should be considered when making the decision. If all prospective outcomes of the
feasible alternatives were exactly the same, then there would be no basis or need for comparison.
Principle 3: Use a consistent viewpoint
The prospective outcomes of the alternatives, economic and other, should be consistently developed
from a defined viewpoint (perspective). It is important that the viewpoint for a particular decision be
first defined and then used consistently in the description, analysis and comparison of the alternative.
Principle 4: Use a common unit of measure
Using a common unit of measurement to enumerate as many of the prospective outcomes as
possible will make easier the analysis and comparison of alternatives.
Principle 5: Consider all relevant criteria
Selection of a preferred alternative (decision-making requires the use of a criterion or several
criteria). The decision process should consider both the outcomes enumerated in the monetary unit
and those expressed in some other unit of measurement made explicit in a descriptive manner.
Principle 6: Make uncertainty explicit
Uncertainty is inherent in projecting for estimating the future outcomes of the alternative recognized
their analysis and comparison.
Principle 7: Revisit your decision
Improved decision-making results from an adoptive process. To the extent practicable, the initial
projected outcomes of the selected alternative should he subsequently compared with the

A sound engineering economic analysis procedure incorporates the basic method and involves
following:
i. Problem recognition, definition and evaluation
ii. Development of feasible alternatives
iii. Development of cash flow for each alternative
iv. Selection of criteria
v. Analysis and comparison of the alternatives
vi. Selection of the preferred alternative
vii. Performance monitoring and post-evaluation results
PROBLEM SOLVING AND DECISION MAKING

An engineering economist draws upon the accumulated knowledge of engineering and economics to
fashion and employ tools to identify a preferred course of action. There is still considerable debate
about their theoretical bases and how they should be used. There are many aspects to consider and
many ways to consider them.
The fundamental approach to economic problem solving is to elaborate on the time-honoured

scientific method. The method is anchored in two worlds: the real, everyday working world and the
abstract, scientifically oriented world as shown above. Problems in engineering and managerial
economy originate in the real world of economic planning, management, and control.
The problem is confined and clarified by data from the real world. This information is combined with
scientific principles supplied by the analyst to formulate a hypothesis is symbolic terms. By
manipulating and experimenting with the abstractions of the real world, the analyst can simulate
multiple configurations of reality that otherwise would be too costly on too inconvenient to
investigate. From this activity a prediction usually emerges. The predicted behaviour is converted
back to reality for testing in the form of hardware designs, or commands. If it is valid, the problem is
solved. If not, the cycle is repeated with the added information that the previous approach was
unsuccessful.

INTEREST AND TIME VALUE OF MONEY

COMMON TERMS
PRESENT WORTH – Present worth, Present Value and Principal all represent the value of money at
time zero, which is the beginning of the engineering economic analysis period under investigation. In
formulas, the present sum of money may be labelled as PW, PV, P or PO. All four of these symbols
represent the same initial time frame, which is time zero.
FUTURE WORTH – Future worth (FW), future value (F) or (Fn) represent the future sum of money
including principal plus interest. Future values occur at any point in time in the future and they are
usually designated as the end of the engineering economic analysis period if they are the last activity
to occur in the analysis period. The future worth of present values, and payments and disbursement
streams, includes interest on the money invested or withdrawn from an account.
ANNUITY – Annuities (A) represent a payment or disbursement stream deposited or withdrawn at

equal set intervals such as daily, weekly, monthly or yearly. As each annuity is deposited into an
interest bearing account, it begins to draw interest at the end of each compounding period. The
annuities deposited, plus any previous interest earned, are used when calculating the interest on the
funds in the account at the end of each period.
A series of payments made at the beginning instead at the end of each period is referred to as annuity
due.
SALVAGE VALUE – The salvage value is what an asset is worth at the end of its useful life. In
engineering economic analysis, the salvage value is represented by a future value occurring at the
end of the analysis period. It is not always possible to accurately determine what a future salvage
value of an asset will be; therefore, for the purpose of an analysis, a reasonable salvage value is
assumed and included in the calculations. Many times, salvage values for similar items from previous
projects are incorporated into a new analysis.
SUNK COST – Sunk cost represents funds not recoverable because they have already been expended
some time in the past. This is known as the past cost of an equipment/asset. Let us assume that an
equipment has been purchased for ₹ 3,00,000 about three years back. If it is considered for
replacement, then its present value is not ₹ 3,00,000. Instead, its present market value should be
taken as the present value of the equipment for further analysis. So, the purchase value of the
equipment in the past is known as its sunk cost. The sunk cost should not be considered for any
analysis done from now onwards.
MARGINAL COST – Marginal cost of a product is the cost of producing an additional unit of that
product. Let the cost of producing 50 units of a product be ₹ 30,000, and the cost of producing 31
units of the same product be ₹ 30,100. Then the marginal cost of producing the 51st unit is ₹ 100.

OPPORTUNITY COST – In practice, if an alternative (A) is selected from a set of competing alternatives
(A,B), then the corresponding investment in the selected alternative is not available for any other
purpose. If the same money is invested in some other alternative (B), it may fetch some return. Since
the money is invested in the selected alternative (A), one has to forego the return from the other
alternative (B). The amount that is foregone by not investing in the other alternative (B) is known as
the opportunity cost of the selected alternative (A). So the opportunity cost of an alternative is the
return that will be foregone by not investing the same money in another alternative. Consider that a
person has invested a sum of ₹ 75,000 in shares. Let the expected annual return by this alternative
be ₹ 10,000. If the same amount is invested in a fixed deposit, a bank will pay a return of 18%. Then,
the corresponding total return per year for the investment in the bank is ₹ 13,500. This return is
greater than the return from shares. The foregone excess return of ₹ 3,500 by way of not investing
in the bank is the opportunity cost of investing in shares.
CAPITALIZED COST – Capitalized cost is a term used in engineering economics and it refers to the
present worth of a project with an infinite life. In other words, capitalized cost is a lump sum of money
needed today (t = 0) to support an infinite life project simply on earned interest only. The concept of
capitalized cost usually applies to public projects such as airports, bridges, dams, and long-term
private projects such as hospitals and private airports. Since most present value interest factors are
the same after 50 to 100 years depending on interest rates, the concept of perpetual annuity may be
used to determine the present worth of infinite life projects as capitalized cost. Since it is difficult to
calculate the capitalized cost of a project with a stream of infinite cash flows when they vary from
year to year or they occur irregularly, it is necessary first to convert those cash flows to a uniform
series or annuity and then use the perpetual annuity concept to calculate the capitalized cost of that
project. Capitalized cost can also be defined as the present worth of an annuity that will last forever.

BREAK EVEN ANALYSIS

Break even analysis examines the relationship between the total revenue, total costs, and total
profits of the firm at various levels of output. It is used to determine the Break Even Point i.e. sales
volume required for the firm to break even the total profits and the losses at the other sales level.
Break Even point is therefore a point where the losses cease to occur while profits have not yet
begun. It is the point of zero profit.
Fixed costs – the costs that do not change when the quantity of output changes. Some examples of
fixed costs include rent, insurance premiums, or loan payments. Fixed costs can create economies of
scale, which are reductions in per-unit costs through an increase in production volume. This idea is
also referred to as diminishing marginal cost.
Variable costs – the corporate expenses that vary in direct proportion to the quantity of output.
Examples of common variable costs include raw materials, packaging, and labour directly involved in
a company's manufacturing process.
Basic assumptions in Break Even Analysis

(i) All costs can be separated into fixed and variable components.
(ii) Fixed costs will remain constant at all volumes of output.
(iii) Variable costs will fluctuate in direct proportion to volume of output.
(iv) Selling price will remain constant.
(v) Product-mix will remain unchanged.
(vi) The number of units of sales will coincide with the units produced so that there is no opening or
closing stock.
(vii) Productivity per worker will remain unchanged.
(viii) There will be no change in the general price level.
Break-even point represents that volume of production where total costs equal to total sales
revenue resulting into a no-profit no-loss situation.
K M CHAITANYA, DEPT OF CTM, AIT

P is the break-even point in the break-even chart where OS and CT, being the sales line and total cost
line intersects. Loss results in the left side of P, i.e., before the break-even point is reached, and,
beyond P, profit starts to generate. Break-even point has a wide use in the field of marginal costing
and helps to decide the product mix, fixation of selling price, steps to be taken in long-term planning
etc.
Therefore, at break-even point.
Sales Revenue = Total Cost
Sales – Variable Cost = Contribution = Fixed Cost
It can be concluded that at break-even point the contribution earned just covers the fixed cost and,
at levels below the point, contribution earned is not sufficient to match the fixed cost and, at levels
above the point, contribution earned more than recovers the fixed cost.
Break-even point can be ascertained by using the following formula:
Fixed cost Fixed cost
Break even point = =
Contribution per unit Sales price per unit – Variable cost per unit
Break even point (₹) = Sales price per unit X Break Even Point in units
Uses of Break Even Analysis

(i) It helps in the determination of selling price which will give the desired profits.
(ii) It helps in the fixation of sales volume to cover a given return on capital employed.
(iii) It helps in forecasting costs and profit as a result of change in volume.
(iv) It gives suggestions for shift in sales mix.
(v) It helps in making inter-firm comparison of profitability.
(vi) It helps in determination of costs and revenue at various levels of output.
(vii) It is an aid in management decision-making (e.g., make or buy, introducing a product etc.),
forecasting, long-term planning and maintaining profitability.
(viii) It reveals business strength and profit earning capacity of a concern without much difficulty and
effort.
Limitations of Break Even Analysis

(i) Break-even analysis is based on the assumption that all costs and expenses can be clearly
separated into fixed and variable components. In practice, however, it may not be possible to achieve
a clear-cut division of costs into fixed and variable types.
(ii) It assumes that fixed costs remain constant at all levels of activity. It should be noted that fixed
costs tend to vary beyond a certain level of activity.
(iii) It assumes that variable costs vary proportionately with the volume of output. In practice, they
move, no doubt, in sympathy with volume of output, but not necessarily in direct proportions.

(iv) The assumption that selling price remains unchanged gives a straight revenue line which may not
be true. Selling price of a product depends upon certain factors like market demand and supply,
competition etc., so it, too, hardly remains constant.
(v) The assumption that only one product is produced or that product mix will remain unchanged is
difficult to find in practice.
(vi) Apportionment of fixed cost over a variety of products poses a problem.
(vii) It assumes that the business conditions may not change which is not true.
(viii) It assumes that production and sales quantities are equal and there will be no change in opening
and closing stock of finished product, these do not hold good in practice.
(ix) The break-even analysis does not take into consideration the amount of capital employed in the
business. In fact, capital employed is an important determinant of the profitability of a concern.

MODULE 5: ENTREPRENEURSHIP
The spirit of enterprise makes a person is entrepreneur. Entrepreneur thus is an innovator who
carries out new combinations in ever changing environment to initiate & accelerate the process of
economics social & technological development. He who uses searches for changes responds to it &
exploits the opportunity. The person having a dynamic activity to prime changes in the process of
production, innovations in business, new ideas & usages of resources, establishing new markets.
EVOLUTION OF CONCEPT OF ENTREPRENEUR

The word ‘entrepreneur’ is derived from French word ‘Entreprendre’ which was used to designate
an organizer of musical or other entertainments. Later in 16th century it was used for army leaders.
It was extended to cover civil engineering activities such as construction in 17th century. But it was
Richard Cantillon, an Irishman living in France who first used the term entrepreneur to refer to
economic activities. According to Cantillon “An entrepreneur is a person who buys factor services at
certain prices with a view to selling its product at uncertain prices”. Entrepreneur, according to
Cantillon, an entrepreneur is a bearer of risk, which is non-insurable. Schum Peter gave a central
position to the entrepreneur who believed that an entrepreneur was a dynamic agent of change; that
an entrepreneur was a catalyst who transformed increasingly physical, natural and human resources
into correspondingly production possibilities. Since then the term entrepreneur is used in various
ways and various views.
CONCEPT OF ENTREPRENEUR
As said above entrepreneur is used in various ways and various views. These views are broadly
classified into three groups, namely risk bearer, organizer and innovator.
Entrepreneur as risk bearer: Richard Cantilon defined entrepreneur as an agent who buys factors as
production at certain prices in order to combine them into a product with a view to selling it at
uncertain prices in future. He illustrated a former who pays contractual incomes, which are certain
to land owners and labourer’s, and sells at prices that are ‘uncertain’. He includes merchants also
who make certain payments in expectation of uncertain receipts. Hence both of them are risk-bearing
agents of production.
P.H. Knight described entrepreneur to be a specialized group of persons who bear uncertainty.
Uncertainty is defined as risk, which cannot be insured against and is incalculable. He made
distinction between certainty and risk. A risk can be reduced through the insurance principle, where
the distribution of outcome in a group of instance is known, whereas uncertainty cannot be
calculated.
Entrepreneur as an organizer: According to J Baptist Say “an entrepreneur is one who combines the
land of one, the labour of another and capital of yet another, and thus produces a product. By selling
the product in the market, he pays interest on capital, rent on land and wages to labourer’s and what
remains is his/her profit”. Say made distinction between the role of capitalist as a financer and the
entrepreneur as an organizer. This concept of entrepreneur is associated with the functions of
coordination, organisation and supervision.

Entrepreneur as an innovator: Joseph A Schum Peter in 1934 assigned a crucial role of ‘innovation’
to the entrepreneur. He considered economic development as a dynamic change brought by
entrepreneur by instituting new combinations of factors of production, i.e. innovations. The
introduction of new combination according to him, may occur in any of the following forms.
(a) Introduction of new product in the market.
(b) Use of new method of production, which is not yet tested.
(c) Opening of new market.
(d) Discovery of new source of raw materials.
(e) Bringing out of new form of organisation.
Schum Peter also made distinction between inventor and innovator. An inventor is one who discovers
new methods and new materials. An innovator utilizes inventions and discovers in order to make
new combinations.
Hence the concept of entrepreneur is associated with three elements risk bearing, organizing and
innovating. Hence an entrepreneur can be defined as a person who tries to create something new,
organizes production and undertakes risks and handles economic uncertainty involved in
enterprise.
CHARACTERISTICS OF ENTREPRENEUR
1. A good entrepreneur should be action oriented enthusiastic & energetic & ready to take risk at all
levels to achieve the goal.
2. Should have determination & commitment.
3. Creativeness & result oriented, lord working
4. Accepts responsibilities with enthusiasm,
5. Self confident deactivated & self disciplined
6. Both thinker & doer planner & worker,
7. Future vision intelligent, imaginative & self directed
FUNCTIONS OF AN ENTREPRENEUR
An Entrepreneur has to perform a number of functions right from the generation of idea up to the
establishment of an enterprise. He also has to perform functions for successful running of his
enterprise. Entrepreneur has to perceive business opportunities and mobilize resources like man,
money, machines, materials and methods. The following are the main functions of an Entrepreneur.
1. Idea generation: The first and the most important function of an Entrepreneur is idea generation.
Idea generation implies product selection and project identification. Idea generation is possible
through vision, insight, keen observation, education, experience and exposure. This needs scanning
of business environment and market survey.
2. Determination of business objectives: Entrepreneur has to state and lay down the business
objectives. Objectives should be spelt out in clear terms. The Entrepreneur must be clear about the
nature and type of business, i.e. whether manufacturing concern or service oriented unit or a trading

business so that he can very well carry on the venture in accordance with the objectives determined
by him.
3. Rising of funds: All the activities of the business depend upon the finance and hence fund rising is
an important function of an Entrepreneur. An Entrepreneur can raise the fund from internal source
as well as external source. He should be aware of different sources of funds. He should also have
complete knowledge of government sponsored schemes such as PMRY, SASY, REAP etc. in which he
can get government assistance in the form of seed capital, fixed and working capital for his business.
4. Procurement of machines and materials: Another important function of an Entrepreneur is to
procure raw materials and machines. Entrepreneur has to identify cheap and regular sources of raw
materials which will help him to reduce the cost of production and face competition boldly. While
procuring machineries he should specify the technical details and the capacity. He should consider
the warranty, after sales service facilities etc. before procuring machineries.
5. Market research: Market research is the systematic collection of data regarding the product which
the Entrepreneur wants to manufacture. Entrepreneur has to undertake market research persistently
to know the details of the intending product, i.e. the demand for the product, size of the
market/customers, the supply of the product, competition, the price of the product etc.
6. Determining form of enterprise: Entrepreneur has to determine form of enterprise depending
upon the nature of the product, volume of investment etc. The forms of ownership are sole
proprietorship, partnership, Joint Stock Company, co-operative society etc. Determination of
ownership right is essential on the part of the entrepreneur to acquire legal title to assets.
7. Recruitment of manpower: To carry out this function an Entrepreneur has to perform the following
activities.
(a) Estimating man power requirement for short term and long term.
(b) Laying down the selection procedure.
(c) Designing scheme of compensation.
(d) Laying down the service rules.
(e) Designing mechanism for training and development.
8. Implementation of the project: Entrepreneur has to develop schedule and action plan for the
implementation of the project. The project must be implemented in a time bound manner. All the
activities from the conception stage to the commissioning stage are to be accomplished by him in
accordance with the implementation schedule to avoid cost and time overrun. He has to organize
various resources and coordinate various activities. This implementation of the project is an
important function of the Entrepreneur.
All the above functions of the Entrepreneur can precisely be put into three categories of innovation,
risk bearing, and organizing and managing functions.
INTRAPRENEURS
A new breed of entrepreneurs is coming to the fore in large industrial organizations. They are called
as ‘Intrapreneurs’. An Intrapreneur is the entrepreneurship within the existing business structure. It
bridges the gap between science & market place. Existing business will have the financial resources,

necessary skills to carry out business, the marketing & distribution systems to commercialize the
innovation. In bureaucratic structure, due to the focus on short term profits & a highly structured
organization, prevent creativity & development of new products. The differences in the
entrepreneurial & managerial domains have contributed towards an increased need for
entrepreneurship. Some individual having self confidence, self motivation & belief in their own
talents, often desire to innovate new things on their own. They want to own responsibilities & to
work in their own way. They become frustrates if this freedom is not given to them & get demotivated
entrepreneurship is one such method of providing freedom, stimulating & capitalizing on individuals
in an organization who think that things can be done in different & better way.
The resistance against flexibility, growth & diversification can be overcome by developing a spirit of
entrepreneurship within the organization called a entrepreneurship. It reflects in the proportionate
increase in social, cultural & business pressures.
ULTRAPRENEURS
Through the entrepreneurship has been there for a long time, its performance and execution evolve
with the prevalent economic conditions of the day. The entrepreneurs of the 90s are a different breed
in relation to their immediate predecessors from the 80s. Thus, the path of successful
entrepreneurship is ever changing as the art and science of entrepreneurship, is taking a new colours.
Now-a-days new products and services are conceived, created, tested, produced and marketed very
quickly and with great speed. Therefore, today’s entrepreneurs need to have different mind-set
about establishing and operating a company. This mind set is what is called ultrapreneuring.
Difference between entrepreneurs and intrapreneurs
Sl No ENTREPRENEURS INTRAPRENEURS
He is independent in his operation. He is dependent on the entrepreneurs
1 DEPENDENCY
i.e. owner.
RAISING OF He himself raises funds required for He does not raise funds for the
2
FUNDS the organization. organization.
Entrepreneurs bears the risk He does not fully bear the risk involved
3 RISK
involved in the business. in the organization.
An entrepreneur operates from An intrapreneur operates from inside.
outside. Intrapreneurs takes the responsibility
Entrepreneurs converts the ideas of creating innovation.
4 OPERATION
into viable opportunities. He is provided with a variety of
Entrepreneurs takes the profit of perquisite for his innovation.
the business.
CONCEPT OF ENTREPRENEURSHIP
It is a process undertaken by entrepreneur to augment his business interests. It is defined as an
indivisible process flourishes, when the interlinked dimensions of individual psychological
entrepreneurship, entrepreneur traits, social encouragement, business opportunities government
policies, availability of resources, opportunities coverage towards the common good, development
of society & economy.
Entrepreneurship in today’s context in the product of teamwork & ability to crate, build & work as
team. It is also a process of identifying opportunities in the market place, arranging the resources

required to pursue these opportunities & inverting the resources to exploit the opportunities for
better gains.
Higgins defines the function of foreseeing investment & production opportunities, organizing an
enterprise to undertake a new production process, raising capital hiring labour, arranging the supply
of raw materials, finding site, introducing new technique, discover age new sources of raw materials
& selecting top managers for day to day operation.
Cole’s explains the purposeful activity of an individual or a group of associated individuals undertaken
to initiate, maintain or organize profit by production or distributing of economic goods & services.
All the above definitions highlight risk bearing, introversion & resource organizing achieving goal their
production of goods or services.
ELEMENTS OF ENTREPRENEURSHIP
It is the legal agreement that happens between the person & organization The entrepreneurship has
four important Elements
1. New business venturing - This is the corporate venturing, the creation of new business within the
organization. This includes redefining the company’s products or services, development of new
market segment or formation of new corporate ventures.
2. Innovations - Innovation is the development of new products, improvement of existing products,
development of improved & simplified production methods & procedures.
3. Self-renewal - This is the transformation of an organization their renewal of main ideas. This
includes a redefinition of a business concept, reorganization or modification in the system with an
aim to initiate innovating.
4. Pro-activeness – Pro-activeness includes initiative & risk thing competitiveness & dashing to take
new challenges, organization with this type of pro-activeness spirit will lead the market than follow
the competitors.
CHARACTERISTICS OF ENTREPRENEURSHIP
1. Innovation - Entrepreneurship involves innovation of new things to effect dynamic changes & good
success in economy. It should create conditions for growth of economy.
2. Risk – taking Risk is an inbuilt element of any business. Entrepreneurship should be risk bearing to
the uncertainty of future.
3. Skilful management - Entrepreneurship hinges together various functions of the management
planning organizing staffing directing controlling & leading.
4. Organization - It being together various facilities of production for an efficient & economical use.
5. Decision-making - Decision-making is very vital. Taking decision at all levels & stages of
entrepreneurship is a routine task.
6. Making the enterprise a success - It is mainly an economic activity as it deals with creating &b
operating an enterprise. It involves in satisfying the needs of customers with the help of production
and distribution of goods & services. This makes the enterprise a success.

STAGES IN THE ENTREPRENEURIAL PROCESS

1. Identification of opportunity
2. Evaluation of opportunity
3. Preparation of business plan
4. Determination & organizing the resources
5. Management of enterprise.
Identification of opportunity – This is the first step in the entrepreneurial process. This may be from
his own idea or from external sources like consumers & business association, members of distribution
system, independent technical organizations, consultants, government organizations and R and D
centres.
Evaluation of opportunity – Opportunity identified must be carefully screened and evaluated. This
evaluation is the most critical element of the entrepreneurial process. The evaluation process
involves looking at the length of opportunity, its real and perceived value, its risk and return, its fit
with personal skills and goals of the entrepreneur and it uniqueness or differential advantage in its
competitive environment. SWOT (Strength, Weakness, Opportunities and Threats) Analysis is one of
the useful analysis tool.
Evaluation of opportunity includes,
1. Description of product
2. Agreement of opportunity
3. Assessment of the entrepreneur
4. Resources needed
5. Amount & sources of capital
6. Profit expected
Development of a business plan – To achieve the proposed business opportunity, a well defined
business plan need to be developed. A good business plan is very essential to develop the opportunity
and determine the resources received, pooling up the resources for successful managing of the
proposed venture. A business plan should contain,
1. Title of project, table of contents & executive summary
2. Description of business & industry.
3. Technology plan
4. Financial plan
5. Organization plan
6. Production & operation plan
7. Marketing & distribution plan
8. Summary
Determination and organising the resources – This process begins with the assessment of present
resources. Enough care must be taken not to underestimate the amount and nature of resources
required. The risk involved with insufficient and incorrect resources should be calculated.
Management of enterprise – After resources are acquired, the entrepreneur must use them to
implement the business plan. The operational problems of the growing enterprise must also be
examined.

BARRIERS TO ENTREPRENEURSHIP
A large number of entrepreneurs particularly in the small enterprises fail due to several problems
and barriers. The greatest barrier to entrepreneurship is the failure of success. Karl. H. Vesper has
identified the following entrepreneurship barriers:
1. Lack of a viable concept
2. Lack of market knowledge
3. Lack of technical skills
4. Lack of seed capital
5. Lack of business know how
6. Complacency—lack of motivation
7. Social stigma
8. Time presence and distractions
9. Legal constraints and regulations
10. Monopoly and protectionism
11. Inhibitions due to patents
SUPPORTING AGENCIES OF GOVERNMENT

The Central Government through its ministry of Small-Scale Industries and all the State Governments
have started a number of agencies – both at Central and State level – to provide infrastructure and
support services to small enterprises. A classification of all such agencies are:
I. Central Level Institutions
II. State Level Institutions
III. Other Agencies
CENTRAL LEVEL INSTITUTIONS

1. SSI BOARD: Small Scale Industries Board. It is the apex advisory board to the central government
in matters related to small scale sector in the country.
2. KVIC: Khadi and Village Industries Commission. It promotes development of Khadi and other village
industries.
3. SIDO: Small Industries Development Organization: It mainly acts as a nodal agency and an interface
between Central and State Governments. It also gives wide ranging technical and consultancy
services.
4. NSIC: National Small Industries Corporation Ltd.,
5. NSTEDB: National Science and Technology Entrepreneurship Development Board. This agency
promotes usage of science and technology in SSI sectors.
6. NPC: National Productivity Council. This agency suggests various ways of improving productivity.
7. NISIET: National Institute for Small Industry Extension and Training. It imparts high quality training
to budding as well as existing entrepreneurs. It is located in Hyderabad.
8. NIESBUD: National Institute for Entrepreneurship and Small Business Development. It co-ordinates
the efforts of various agencies involved in entrepreneurship development. It is located in New Delhi.

9. IIE: Indian Institute of Entrepreneurship. It aims to carry out research and development activities
in entrepreneurship studies. It is located in Guwahati.
10. EDII: Entrepreneurship Development Institute of India. It is an autonomous body sponsored by
financial institutions like IDBI, ICICI etc., and engaged in spearheading and inspiring entrepreneurship
movement in India. It is located in Ahmedabad.
STATE LEVEL INSTITUTIONS

1. DI: Directorate of Industries. It is involved in promotion of small scale sector at the state level.
2. DIC: District Industries Centre
3. SFC: State Financial Corporation. It provides financial support for starting SSI's
4. SIDC: State Industrial Development Corporation. It promotes infrastructure facilities
5. SSIDC: State Small Industrial Development Corporation. It helps small and tiny units in
procurement of scarce raw materials. It also gives other services.
OTHER AGENCIES:
There are a number of other agencies – both Central and State level – which directly or indirectly
help the cause of Small Scale sector in India, mainly in financial and industrial domain. They are:
1. SIDBI: Small Industries Development Bank of India
2. NABARD: National Bank for Agricultural and Rural Development
3. HUDCO: Housing and Urban Development Corporation Ltd.,
4. NGO's: Non-Governmental Organizations
5. EPC: Export Promotion Council
6. CII: Confederation of Indian Industries
7. FICCI: Federation of Indian Chambers of Commerce and Industry
8. ASSOCHAM: Associated Chamber of Commerce and Industry of India
9. WASME: World Association for Small and Medium Enterprise
10. LUB: Laghu Udyog Bharati
11. ICSI: Indian Council of Small Industries
12. CSIR: Council of Industrial and Scientific Research.

MSME – MICRO, SMALL AND MEDIUM ENTERPRISE
Definition
In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act,
2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:
1. Manufacturing Enterprises-The enterprises engaged in the manufacture or production of goods
and are defined in terms of investment in Plant & Machinery.
2. Service Enterprises:-The enterprises engaged in providing or rendering of services and are defined
in terms of investment in equipment.
Investment for plant, machinery or equipment’s

Classification
Manufacturing Enterprises Service Enterprises
MICRO Up to Rs. 25 Lakhs Up to Rs. 10 Lakhs
Above Rs. 25 Lakhs and up to Rs. 5 Above Rs. 10 Lakhs and up to Rs. 2
SMALL
Crore Crore
Above Rs. 5 Crore and up to Rs. 10 Above Rs. 2 Crore and up to Rs. 5
MEDIUM
Crore Crore
Categorisation of activities under

Manufacturing Enterprises – Printing, Medical Equipment, Ayurvedic Product, Cigarette and other
tobacco products manufacturing, generation of electricity through windmill etc.
Service Enterprises – hospitals, hotels, restaurant, hotels, education, training, software services etc.
MSME plays an important role for the economic development of the country. The major advantage
of the sector is its employment potential at low capital cost. The labour intensity of the MSME sector
is much higher than that of the large enterprise.
CHARACTERISTICS OF MSME/SSI
MSME/SSI have special features, which distinguish them from large-scale industries. The different
characteristics of MSME/SSI are:
1. Its a One-man-show at most SSI's
2. Capital investment is low.
3. Most SSI's are fairly labour intensive with comparatively smaller capital investment.
4. They can also be found in rural and semi-urban areas
5. They are generally involved in the production of light consumer goods, specific industrial
components, simple-to-process food items.
6. Small scale units generally use local resources although the market for its products can be far and
wide
7. SSI's are generally labour intensive.
8. Organization structure of an SSI would be very simple.
9. SSI's have a tendency of folding up very soon.
10. Human resources, especially women and children, are exploited.

11. The market share of an SSI is usually very small. Scaling becomes a problem.
12. Division and specialization of labour is low.
OBJECTIVES OF MSME/SSI
The main objectives of developing Micro, Small & Medium Enterprises/ Small Scale Industries in India
are as follows:
1. To generate immediate and large scale employment opportunities in all parts of the country with
relatively low investment.
2. To reduce the unemployment and underemployment problems in the country.
3. To encourage setting up of industries in small towns and villages thus improving local economy.
4. To bring poor and backward areas to the mainstream of national development.
5. To ensure a better and equitable distribution of national income and wealth.
6. To mobilize the country's untapped capital and human resources.
7. To generally improve the standard of living in our country.
8. To encourage small entrepreneurs and help them grow and realize their dreams.
SCOPE OF MSME/SSI
'Scope of MSME/ SSI' generally means the range of activities and the type of products that come
under the SSI sectors. Some of the important activities that SSI's are normally involved in are:
1. Manufacturing activities
2. Construction activities
3. Public utilities
4. Service/Repairing activities
5. Financial activities
6. Retailing activities
7. Wholesale business
In India, the Small Scale Sector is provided by the Government, by the way of reservation. This means
that the Indian Government has made a list of 114 items which are reserved for exclusive production
in small sector. No large scale industry may produce any of these items reserved in favour of SSI's.
The main objective of this reservation policy is to insulate the small sector from unequal competition
with large industrial establishments. Although this policy has some negative effects, by and large it
has helped SSI.
Some of the items in the reserved list of 114 as it stands today are:
Leather products, Cotton hosiery, Rubber products, Scientific instruments, Natural essential oils,
Auto ancillary, Boat making, Electrical goods, Tricycles and perambulators, Printing presses,
Stationery items, Wooden furniture, Sports goods, Flour mills, Ceramics, Foundaries, Electro plating,
Ice creams, Food processing, Pickles and Chutneys, Lock making, Khadi products.

ROLE OF MSME/ SSI IN ECONOMIC DEVELOPMENT

Small Scale Industries play a vital role in the development of Indian economy in the following ways:
1. Providing Employment: Since SSI's are more labour intensive and less sophisticated technologically,
they provide employment on large scale. Since India has a large number of semi-skilled and unskilled
labour, this helps the cause of development. In fact, SSI accounts for 75% of total employment in the
industrial sector and about 20 million people are currently employed in SSI in India.
2. Mobilization of local resources: SSI uses local resources with respect to raw materials, labour,
talent, savings etc., thus improving local economy, SSI also helps in promotion of traditional family
skills and handicrafts and therefore facilitates the identification and growth of local entrepreneurs.
3. Feeding large scale industries: Small scale industries complement the large scale industries by
providing them parts, components, sub-assemblies, accessories, services etc.
4. Promotion of exports: SSIs help improve India's balance of payments in two ways:
 First, they do not require importing of sophisticated equipment thus saving foreign exchange.
 Second, they export their goods and earn foreign exchange. In recent years, there has been a
substantial increase in exports from Indian SSI's which accounts for around 25% of India's
total exports.
5. Equitable distribution of wealth: SSI's help an equitable distribution of India's income and wealth
by creating more small business than large business.
6. Promoting Regional Development: Since SSI's can be set up in rural and semi-urban areas of the
country, they help promoting a balanced regional development. This also reduces congestion in
cities, migration of villagers to cities, pollution in cities etc.
7. Capital Optimization: Small Scale Units requires less capital per unit of output produced. They also
provide quick return on investments due to shorter gestation period (time taken to start an industry
and produce goods). Both these factors help capital optimization and profitability.
8. Inspiring new entrepreneurs: Existing and successful small scale industries inspire many more
entrepreneurs to start on their own which proves quality and competition which in turn helps the
cause of Indian economy.
Advantages of MSME/ SSI

The Micro, Small & Medium Enterprises/ Small Scale Sector has several distinct advantages-both
economic and social over large-scale sectors. Some of them are:
1. Small Scale Industries provide self-employment opportunities with relatively low investments.
2. Most units do not require high-end technology.
3. These industries can be located anywhere.
4. They use local resources and local manpower thus improving local economy.
5. Time taken from conceptual stage to production stage (gestation period) is less.
6. They help earn and save foreign exchange.
7. Small firm are viewed favourably by the society because wealth is not concentrated in few hands.
8. They make use of large semi-skilled and unskilled labour that is available in our country.
9. They introduce to the world local craftsmanship and handicrafts.
10. Small firms require simple technology and low managerial skills.

11. They assist large and medium industries by acting as ancillaries.

12. They inspire many more entrepreneurs to start their own ventures that improves quality and
competition.
Weaknesses of SSI
The following issues may be generally considered as weaknesses of SSI sector:
1. Raw Material: The problem with respect to raw material could be in shape of
(i) Absolute scarcity
(ii) Poor quality
(iii) High costs.
2. Finance: The problem of finance in small sector is mainly due to two reasons
Firstly, it could be partly due to scarcity of capital in the country as a whole.
Secondly it is due to weak creditworthiness of small units in the country.
3. Marketing: SSI units may lack professional marketing executives as employed by large sectors.
Hence marketing can be a weakness.
4. Capacity under-utilization: Studies have shown that capacity in SSI is not fully utilized leading to
lower optimization and profitability.
5. Outdated Technology: Continued usage of old technology and no upgradation brings down their
efficiency.
6. Over protection: Most SSI units do not have desire to grow to medium and large scale because of
the benefits of protection and reservation given to them.
7. Inefficient Entrepreneurs: Entrepreneurs who are young, and lack industrial experience, and also
whose financial background is weak and those who are stressed out, are all likely to fail faster.
8. Zero R&D: Small Scale sectors hardly invest in R&D which prevents them from introducing any
innovation into the market.
9. Lack of Successors: When many entrepreneurs who run SSI units become old
(i) They may transfer the responsibility to their children who might be inefficient, or
(ii) They may have children who are unwilling to continue family business.
Due to both these reasons the unit may die a slow death.
INTRODUCTION TO DIFFERENT SCHEMES

TECSOK: TECHNICAL CONSULTANCY SERVICES OF KARNATAKA
It was established in 1976 by the government of Karnataka. It is located in Basava Bhavan,
Basaveshwara Circle, Banglore.
Nature of support: Multi-disciplinary technical, industrial and management consultancy.
Objectives:
(i) To provide reliable consultancy support for entrepreneurs to startup self-employment
ventures in Karnataka.
(ii) To provide consultancy services to the various Departments and Agencies of state and Central
Governments.

Functions:
(i) To identify investment opportunities which are location specific.
(ii) To assist entrepreneurs in obtaining statutory and procedural clearances.
(iii) To carry out feasibility studies and environmental impact studies.
(iv) To assist preparation of detailed project reports as per investment norms and financial norm.
(v) To carry out market survey and research specific to industry needs.
(vi) To assist in project implementation and extend turn key assistance.
(vii) To help in reorganization and restructuring of employees.
(viii) To diagnose sick units and suggest rehabilitation measures
(ix) To provide consultancy in valuation of assets, manpower, planning and budgetary control
system
(x) To promote consultancy for merges and take overs.
Types of help:
Since its inception TECSOK has catalysed a large number of industries throughout Karnataka.
KIADB: KARNATAKA INDUSTRIAL AREA DEVELOPMENT BOARD

This is a statutory body established in 1966 by government of Karnataka. Headquarters is at
Bangalore with 9 zonal offices all over Karnataka.
Objectives:
(i) To establish Industrial areas and promote rapid and orderly establishment of industries in the
state of Karnataka
(ii) To provide infrastructural facilities and amenities to SSIs
(iii) To assist in implementation of government policies
(iv) To function on 'No profit – No loss' basis.
Functions:
(i) To acquire lands for industrial activity at identified and notified locations and form industrial
area with all infrastructure facilities like - Road - Electricity power - Water supply
(ii) To acquire lands in favour of single unit.
(iii) To acquire lands for single unit complexes for government organizations and to facilitate
government projects
(iv) To provide all the infrastructure facilities to such industrial areas.
(v) To maintain the infrastructural facilities during the contractual project.
Types of help:
Till date KIADB has found 95 industrial areas spread all over the state and acquired land for nearly
290 single unit complexes.
KSSIDC: KARNATAKA STATE SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD

Established in 1960 by Government of Karnataka.
Nature of support: Infrastructure and industrial inputs.
Objectives:
(i) To assist small scale industries in the procurement of raw materials (
(ii) To take up any activity aimed at rapid development of small scale industry

Functions:
(i) To establish and manage industrial estates
(ii) To procure and distribute scarce and rare raw materials to various SSIs
(iii) To provide assistance towards marketing of products from various SSIs
(iv) To organize national level and international level exhibition and facilitate exchange of
information
(v) To supply machinery under hire purchase scheme
(vi) To provide technical library facilities in coordination with Indian Standard Institution.
Types of help
(i) KSSIDC has promoted establishment of ancillary units to help PSU's like BEL, ITI, HAL, NGEF.
BEML etc.
(ii) It has constructed 86 plots exclusively for SC/ST entrepreneurs.
SINGLE WINDOW AGENCY
DIC: DISTRICT INDUSTRIES CENTRE

Launched in 1978 in all districts of each state. There are about 400 DIC's in India.
Nature of support: Information and Consultancy Services. Industrial Inputs.
Objectives:
(i) To effectively promote cottage and small-scale industries in rural areas and small towns.
(ii) To act as a Single Window Agency to help the entrepreneur with all the information under
one roof.
(iii) To serve as an integrated administrative frame work at the district level for industrial
development.
Functions:
(i) Surveys: To carry out surveys to assess the potential of a district with respect to industrial
development taking into account availability of raw material, manpower, infrastructure,
demand for a product etc. This survey provides a basis for advising budding entrepreneurs.
(ii) Action Plan: To prepare an action plan for the industrial development of the district.
(iii) Appraisal: To appraise various investment proposals received from entrepreneurs.
(iv) Guidance: To guide entrepreneurs in selecting appropriate machinery and equipment.
(v) Marketing: To assist entrepreneurs in marketing their products and assess the possibility of
export promotion.
(vi) R&D: To link R&D institutes with entrepreneurial activities for product innovation.
(vii) Training: To conduct artisan training programs.
SISI: SMALL INDUSTRIES SERVICE INSTITUTE

There are 58 SISIs all over the country including one in each State Capital.
Nature of support: Entrepreneurship development, consultancy and training.
Objectives:
(i) To provide consultancy and training to small entrepreneurs – both existing and prospective.
(ii) To serve as an interface between Central and State governments.
(iii) To initiate entrepreneurial promotion programs

Functions:
(i) To render technical support services.
(ii) To conduct Entrepreneurship development programs
(iii) To collect Trade and Market information and share it with entrepreneurs.
(iv) To carry out modernization and in plant studies.
(v) To conduct State and District industrial potential surveys.
(vi) To provide consultancy services.
(vii) To provide training in various trade/activities.
NSIC: NATIONAL SMALL INDUSTRIES CORPORATION LTD.

This is one of the oldest agencies set by the central government in 1955 and is the forefront of
industrial development in the country.
Nature of support: Wide ranging industrial inputs.
Objectives:
(i) To promote, aid and foster the growth of SSI's in the country with a focus on commercial
aspects.
(ii) To enable the Small Scale Industries to gain competitive advantage and to contribute
effectively to the development of the country.
(iii) To evolve special schemes to meet the needs of handicapped, scheduled castes and
scheduled tribe entrepreneurs.
Functions:
(i) To provide machinery on hire-purchase scheme to SSI's
(ii) To procure government orders for small scale units
(iii) To develop small-scale units as ancillaries to large industries.
(iv) To import and distribute scarce and rare raw materials among actual users in the small-scale
sector
(v) To undertake the construction of industrial estates
(vi) To help exporting products of SSIs
(vii) To develop prototype of machines and equipment’s and pass on the know how to SSIs
(viii) To set up SSI in other developing countries.
SIDBI: SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA

It was established in 1990 under Act of Indian Parliament as a principal financial institution. It is a
subsidiary of IDBI. Its head office is in Lucknow. SIDBI is among the top 25 development banks in the
world.
Nature of support: Financial services and other support services
Objectives:
(i) To promote, finance and develop small-scale sector in India.
(ii) To co-ordinate the functions of other institutes engaged in similar activities.
(iii) To finance industrial infrastructure projects.
Functions:
(i) To provide finance assistance to - new projects - expansion/diversification projects -
modernization projects

(ii) To initiate steps for technological upgradation and modernization of existing units.
(iii) To promote rural industrialization
(iv) To provide channels for marketing SSI products in India and abroad.
(v) To foster Human Resource Development to suit the SSI sector needs
(vi) To disseminate appropriate information to budding and existing entrepreneurs.
Types of help
(i) SIDBI has so far disbursed more than 50,000 crores as financial assistance.
KSFC: KARNATAKA STATE FINANCIAL CORPORATION

It was established in 1951 through a State Financial Corp. Act-1951.
Objectives:
(i) To cater to financial requirements of small-scale units.
(ii) To extend medium and long term credits to units which fall outside the preview of Industrial
Finance Corporation and Public Sector Banks.
Functions:
(i) To provide long-term finance to small and medium industrial units organized on different
ownership basis such as proprietorship, partnership, co-operative, public or private company
concern.
(ii) To provide finance to service-oriented enterprises such as travel agencies, car rental agencies,
hotels, tourism-related activities, hospitals and nursing homes etc.
(iii) To take over sick SSI units and auction them to entrepreneurs willing to rebuild.

BUSINESS PLANNING PROCESS

CM&amp;E Full Notes With Problems

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CONSTRUCTION

Construction Project Formulation:

Interest and time value of money:

Micro, Small & Medium Enterprises (MSME):

Business Planning Process:

Recommended Text Books

1. P C Tripathi and P N Reddy, “Principles of Management”, Tata McGraw-Hill Education

3. Poornima M. Charantimath , “Entrepreneurship Development and Small Business Enterprise”, Dorling

Recommended Reference Materials

4. Mike Martin, Roland Schinzinger, “Ethics in Engineering”, McGraw-Hill Education

7. S.C Sharma –“Construction Equipments and its management” – Khanna publishers

K M CHAITANYA, DEPT OF CTM, AIT 1

K M CHAITANYA, DEPT OF CTM, AIT 2

CONTROLLING – Controlling is measuring and correcting of activities of subordinates to make sure

K M CHAITANYA, DEPT OF CTM, AIT 3

 To direct all other functions of management

K M CHAITANYA, DEPT OF CTM, AIT 4

Difference between Policy and Procedure

Difference between Strategic and Tactical Planning

K M CHAITANYA, DEPT OF CTM, AIT 5

CONSTRUCTION PROJECT FORMULATION

INTRODUCTION TO CONSTRUCTION MANAGEMENT

K M CHAITANYA, DEPT OF CTM, AIT 6

CONSTRUCTION PROJECT LIFE CYCLE

K M CHAITANYA, DEPT OF CTM, AIT 7

GENERAL PRINCIPLES FOR FORMING AN ORGANISATIONAL SYSTEM

K M CHAITANYA, DEPT OF CTM, AIT 8

TYPES OF ORGANISATION STRUCTURE

K M CHAITANYA, DEPT OF CTM, AIT 9

K M CHAITANYA, DEPT OF CTM, AIT 10

3. LINE AND STAFF ORGANISATION

K M CHAITANYA, DEPT OF CTM, AIT 11

K M CHAITANYA, DEPT OF CTM, AIT 12

PROJECT MANAGEMENT FUNCTIONS

K M CHAITANYA, DEPT OF CTM, AIT 13

o CONTROLLING – It involves monitoring of the performance and applying corrective measures in

K M CHAITANYA, DEPT OF CTM, AIT 14

K M CHAITANYA, DEPT OF CTM, AIT 15

CONSTRUCTION PLANNING AND SCHEDULING

K M CHAITANYA, DEPT OF CTM, AIT 16

TYPES OF PROJECT PLANS

K M CHAITANYA, DEPT OF CTM, AIT 17

WORK BREAKDOWN STRUCTURE

K M CHAITANYA, DEPT OF CTM, AIT 18

K M CHAITANYA, DEPT OF CTM, AIT 19

K M CHAITANYA, DEPT OF CTM, AIT 20

Project management tools

Development of bar chart

Advantages of Gantt Chart

Limitations of Gantt Chart

K M CHAITANYA, DEPT OF CTM, AIT 21

 Updating a Chart is Very Time Consuming

PREPARATION OF NETWORK DIAGRAM

K M CHAITANYA, DEPT OF CTM, AIT 22

Rules for drawing network

K M CHAITANYA, DEPT OF CTM, AIT 23

Numbering the event (Fulkerson Rule)

CRITICAL PATH METHOD (CPM)

K M CHAITANYA, DEPT OF CTM, AIT 24

Criticality and critical activity

Significance of critical path

ACTIVITY ON NODE (AON) or PRECEDENCE NETWORK

EST ACTIVITY EFT

K M CHAITANYA, DEPT OF CTM, AIT 25

CM&E Full Notes With Problems

CM&E Full Notes With Problems