Ss 09 cost engineering management training- nov 2017 moustafa sec 5 part iii ch 20- 21 2018

KSU- Riyadh- CCP/CCT Cost Engineering Training 1018 BTA -Dr. Moustafa Ismail 2018 20-21 1
Cost Engineering Management
CCP/CCT Training Course:
Association for the Advancement of Cost Engineering
King Saud University
CH 20-21
March 2018
LECTURE 09
Certified Cost Technician
‫وبركاته‬ ‫هللا‬ ‫ورحمة‬ ‫عليكن‬ ‫السالم‬
2018

KSU- Riyadh- CCP/CCT Cost Engineering Training 1018 BTA -Dr. Moustafa Ismail 2018 LEC- IV 2
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March 2018
Contact details
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March 2018KSU- Riyadh- CCP/CCT Cost Engineering Training 1018 BTA -Dr. Moustafa Ismail 2018 LEC- IV 3
CCP Certificate Section 5 Leadership & Management of Project People Ch. 20
 Chapter 20―Leadership & Management of Project People
 Leadership Styles
 Leaders are not always required to directly control team members, but may seek
commitment from them to support goals and objectives.
 Commitment of teams can be through fostering open communication, increased
productivity through group efforts, and participatory decision making.
 The leader does not have to be a technical expert; leading expertise is required.

 Chapter 20―Leadership & Management of Project People
 Leadership Concepts
 Concept 1―Douglas McGregor,
 McGregor stated that management demands a scientific base of research and
application to make it a successful profession.
 To develop the professional manager, the manager should examine how he saw
himself in relation to the job of managing human resources.
 Starting point is a set of fundamental beliefs or assumptions of what people are like.
McGregor developed 2 categories for people behavior relation to the work, Theory X
and Theory Y.

 Concept 1―Douglas McGregor- continue
• Theory X assumptions:
i. The average person has an inherent dislike of work and will avoid it if possible.
ii. The average person must be coerced, controlled, directed, or threatened with
punishment to do adequate effort toward achievement of organizational objectives.
iii. The average person prefers to be directed, wishes to avoid responsibility, has
relatively little ambition, and wants security.
iv. Control should be externally imposed.

• Theory Y assumptions:
i. People are self-motivated and will exercise self-direction and self-control toward
achieving objectives to which they are committed.
ii. Average people learn to not only accept, but also seek responsibility.
iii. People are capable of a high degree of imagination, ingenuity, and creativity in
solving organizational problems.
iv. The average person’s intellectual potential is only partially used.

 Concept 2 Frederick Herzberg:
 Concerned with relationship between the role of work and working conditions.
 Job characteristics lead to satisfaction while other factors lead to dissatisfaction,
that led to the development of the Motivation-Hygiene Theory.
 HE found that real motivation resulted from the worker’s attainment of motivating
factors such as achievement, recognition, responsibility, and advancement.
 Conversely, hygiene factors such as company policies, work conditions, salary, and
status, led to dissatisfaction.
 He noted that addressing the hygiene factors alone would not lead to satisfaction.
 Increasing the challenging content of the job would cause the employee to grow
both in skill and in a feeling of accomplishment; ( after eliminating dissatisfactions)
 Manager must distinguish between hyg. &motivating F to increase job enrichment.

 Concept 3―Chris Argyris
 advanced some of McGregor’s theories
 The organization may be the source and cause of human problems
 Individual needs & organizational needs were not met in most organizations,
 Part of problem, was a result of the bureaucratic nature of organizations and
their hierarchical structures.
 He was an early proponent of the concept of ad hoc work groups, or project
teams that crosscut organizational lines.
 Organization must change to conform to human needs, & organization should
offer meaningful challenges & opportunities for responsibilities.
 A climate of open communication and trust.
 Advocated the development of interpersonal competence and authenticity in
relationships.

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 Concept 4―Rensis Likert,
 Developed an attitude measurement approach known as the Likert-type scale,
 developed concept of linking pin, person who belongs to 2 groups in organiza.
 Likert advocated open communication, development of mutual trust,
consensus decision-making,goal setting, roles definition, shared responsibility.
 Real authority is dependent on how much authority subordinates allow the
manager to exert over them.
 The degree of group commitment and involvement is correlated to degree of
opinions sharing between subordinates & manager in decision making.

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 Concept 4―Rensis Likert, continue
 Likert basic styles of leadership:
i. Exploitive-Authoritative – leader, low concern for people, uses threats to
reach conformance. Downwards commun, ignore psychologically concerns.
ii. Benevolent-Authoritative – uses rewards, listens more to concerns lower
down,some delegation of decisions,almost all major decisions made centrally.
iii. Consultative – Upward flow of information is still cautious & rose-tinted to,
leader is listening carefully to ideas. decisions are still largely centrally made.
iv. Participative Group – The leader makes maximum use of participative
methods, engaging people lower down in decision-making. People across the
organization are psychologically closer together and work well at all levels

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 Concept 5―Drs. Robert Blake and Jane Mouton developed the Managerial Grid
 They believed there was an unnecessary dichotomy in the minds of most managers
between concern for people and production. There are five key styles on the grid, a
manager should be a nine and nine. The manager’s job is one of a coach, an
advisor, or a consultant.

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General-
 Teams, teams perform better than individuals.
 Cross-Cultural Concerns, With multicultural teams, leader must create vehicles to
bridge cultural gap & bring team together. Needs to be aware of cultural differences
 Leading, Managing, Facilitating, and Mentoring
Technical professional must acquire functional knowledge of basic leadership and
management skills.
 Managers challenges with team work
 Uncertain organizational resource support for the project.
 Extreme time pressures.
 First-time challenges to solve unique and complicated problems.
 A wide variety of personnel and other resource interdependencies.
 Challenges of resources from senior managers, may not support project.

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 Skills and abilities for managers:
 Apply both technical and managerial skills in addition to operating as a generalist.
 Motivate team toward goals & objectives of project+ meet individual’s goals
 Create group cohesion without succumbing to ―group think.‖
 Think and thrive under pressure, while integrating & resolving conflicting priorities
 Drive the team toward excellence.
 Work with the emotional, intellectual, and physical challenges in startup &close out
 Three dimensions thinking, timely delivery, cost compliance, and task performance.
 Create mechanisms that encourage discussion of conflict & balance the process
through methods that motivate the team toward decisive action.

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 The role of the project manager:
 is a multifaceted one, PM must be able to assume four different roles:
 Leadership
 Leader of a project is a more subtle, complicated role than just in charge of the
project and is supposed to deliver it on time and within budget.
 Leadership involves the ability to conceptualize the vision and direction of the
project, ability to communicate & sell the vision to the team and other stakeholders.
 Vision is not just an idealistic, amorphous project concept,but identifies the purpose
 Vision determines project added value &recognizes what not said by the customer

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 The role of the project manager, Leadership- continue
 PM shall create a personal vision of project purpose, create a personal
representation of the true purpose of the project.
 The next step is to begin a dialogue with team members for project’s purpose.
 PM shares discussion with the team about the purpose of the project.
 PM must gain credibility and demonstrate managerial behaviors aligned with
verbally espoused values.
 Leadership also involves an active role to be team’s voice to the outside world.
 The leader needs to communicate actively with all stakeholders for project goals,
obtaining resources, providing reports, and addressing conflicts, concerns.
 Active communication between the PM & stakeholders maintains sponsor support,
creates needed ongoing liaisons, and reduce the risk of unexpected obstacles.

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 The role of the project manager, Management
 AS a manager, the PM should:
o Ensure the project is completed on time, within budget, and at acceptable
levels of performance.
o PM is creating the administrative procedures and structure to monitor
completion of the work.
o PM should maintain admin systems with enough structure and discipline,
that ensures work flow with minimum bureaucracy.
 Facilitation
o Facilitation is subtle, profound roles for the PM. Facilitation is to help and
influence others to get their work done. It involves communication
abilities, conflict resolution skills.
o Team-focused motivation involves the creation of strategies that unite the
team in common action and rewards that are realistic.

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 The role of the project manager, Mentor or Coach
 Mentoring and coaching are defined as those processes in which one person
(the mentor or coach) assists another person, either formally or informally, in
various tasks related to the general purposes of professional growth and
development. It may be guidance and encouragement, for a certain project or
to attain broader view of future career directions or advancement.
 Mentoring and coaching involves the following:
 Being a role model in which the project leader demonstrates desired skills,
behavior, and attitudes, if adopted will benefit team members.
 Comment to personal interest in the welfare & professional growth of team .
 Offering suggestions, solutions, problem-solving approaches, think-out-loud
with team members.
 Providing supportive feedback, frank and accurate.
 Offers motivation, assisting team to identifying, achieving professional goals.

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 Motivators and de-motivators,
o Motivation is ―That process, action, or intervention that serves as an incentive
for a team member to take the necessary action to complete a task within the
appropriate confines and scope of performance, time, and cost.
o Intrinsic motivation is which arises from a source within a member, such as a
desire to obtain new skills or the need to confront a stimulating personal
challenge.
o Extrinsic sources of motivation involve a force outside of the individual, such
as recognition from one’s peers in a professional association, or at a
conference; or a manager providing a sizeable pay increase for a job well
done.
o Members of a high performance team tend to be motivated by both sources.
o Manager/leader, must identify appropriate motivation source for each member.

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 Theories of Motivation
 Overview of theories of motivation
o It begins with the premise that motivation involves goal-directed behavior.
1. Biology Theory―
It relates to preservation and expansion of the species (more basic aspects of
human behavior), hunger and thirst, reproduction, and basic survival.
2. Drives Theory― Certain behaviors are result of individuals meeting requirements
of specific drives.
3. Incentive Theory― Individual behavior is pulled in certain directions based on
external conditions in specific setting. Provides that incentives to be appropriate to
organization culture.
4. Needs Theory― Motivation is based on a theory of needs, based on David
McClelland concept that ―people who value the need for achievement are often
those people who are the leaders in the areas of creativity and economic growth―

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5. Fear of Failure Theory― Motivation to act and succeed based on a fear of failure.
6. Hierarchy of Needs Theory―Abraham Maslow presented a hierarchical theory of
motivation, ― needs pyramid‖ Maslow states that:
o When one need is satisfied, the individual will then move upward to the next
need. Maslow’s hierarchy of needs can be described as follows:
i. Level 1 – Physiological needs (food, thirst).
ii. Level 2 – Security and safety needs (stability, survival).
iii. Level 3 – Belonging needs (affiliation, love).
iv. Level 4 – Esteem needs (achievement and the acquisition of recognition).
v. Level 5 – Cognitive needs (knowledge).
vi. Level 6 – Aesthetic needs (beauty, order).
vii. Level 7– Self-actualization needs (the realization of one’s personal potential).
7. Career Theory―E. Schein presents a model that describes major stages in a
personal career, leader understanding of an individual’s current career stage can be
used to develop approaches to individual motivation. The model has 10 career stages.

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8. Empowerment Theory― J.R. Meredith & S.J. Mantel suggest that
The team is then motivated by the opportunity to be self-determinative in creating the
structure and methods to achieve its goals.
9. Ethical Theories and Applications- Ethics is an emotionally and intellectually
charged word. It prompts images of moral responsibility and obligation, scholars
debating the intricacies of profound issues, and arguments between professionals and
social commentators about right and wrong behavior.
The difficulty of establishing sound ethical norms for an organization cannot be
underestimated, as the ethical climate of an
organization is extremely fragile. The task requires unremitting effort, and ethical
codes can be helpful, although not decisive.

March 2018KSU- Riyadh- CCP/CCT Cost Engineering Training 1018 BTA -Dr. Moustafa Ismail 2018 22
CCP Certificate Section 5 Project Labor and Cost Control Ch. 20

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CCP Certificate Section 5 ― Quality Management Ch. 21
Concept of quality management
• Quality management qualified as essential in management tools and methodologies.
• Corporate role models emerged, Six Sigma programs with ―black belt‖ training(GE,
Motorola).
• To validate an organization’s claim to having achieved high quality, the Malcolm
Baldrige Award, established in 1987, US. Japan has honored winners of the Deming
Application Prize.
illustrates the stages of maturity that quality programs progressed through. – SK-6

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Concept of quality management
• The only option that competitors have is to adopt aggressive, confrontational
management styles.
• Value is an ambiguous term and can be highly subjective. A primary responsibility
for executives is to create value for the customer while increasing economic wealth
for employees and shareholders—all at the same time!.
• Value = Performance/Cost
Where performance loosely refers to the right type of results aligned with the
organization’s strategy.
• Quality management is an essential element for managing costs.

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THE ROLE OF CONTINUOUS IMPROVEMENT PROGRAMS
Quality management encompasses many tools and techniques under the umbrella of
what is popularly referred to as continuous
improvement, including Statistical Process Control (SPC), quality control, quality
improvement, quality assurance, and benchmarking.
The emphasis in this section of this study guide is on measuring the financial accounting
aspects, because Six Sigma’s key
differentiator is its emphasis on financial returns justification (in contrast to its
predecessor quality management programs) and
because AACE International is an organization that approaches problem solving and
management from a cost viewpoint. There are
substantial materials about continuous improvement tools and techniques at the website
of the American Society for Quality at:
www.asq.org.
WHY IS TRADITIONAL ACCOUNTING FAILING QUALITY MANAGEMENT?

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DECOMPOSING COST-OF-QUALITY CATEGORIES

March 2018KSU- Riyadh- CCP/CCT Cost Engineering Training 1018 BTA -Dr. Moustafa Ismail 2018 27
CCP Certificate Section 5 Project Labor and Cost Control Ch.21

Ss 09 cost engineering management training- nov 2017 moustafa sec 5 part iii ch 20- 21 2018

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