2023年5月18日 星期四


Part 7, Advanced Civil Construction


MT KAO (Blog: http://mtkaoforum31.blogspot.tw/)



2)  Machine:


(1) Prototype, bespoke; portable, fixed:


a.     Machine, prototype


People in construction industry need to know machine, plant and equipment for their manipulation, size, cost, productivity and required logistic.


The general contractors used to own machines, in the days they're expensive related to human cost and company asset.


When a country starts to build infrastructures, they need to move earth, lift heavy weight, paving concrete and asphalt, and deal with confronting water or other inaccessible.


There're machines typical to do these jobs and we call them the prototypes: bulldozers, cranes, graders, trucks, mixing plants, paving machines, compactors, work boats, etc.


Training of operators and workers are quicker and more economical these days as computerized simulation being introduced for training and the machines become simple in their build-up, maintenance and repair.


The repeating usages of machines is attainable in fledging economies, also the capital to buy them is comparatively less than before; thus the delivery of infrastructures will be more efficient.  


b.   Machine, bespoke


As countries proceed to build infrastructures projects of more sophisticated nature, the machines and the method employed may need special design and fabrication, we called the order and the makes bespoken. The usages are limited unless market is big and structures of similar dimensions are designed and built successively.


The bespoken construction plants, either will be maneuvered and launched by the people, such as advance shoring for bridge superstructure; or will be forwarding automatically as boring machines for the tunnel. It is something that a civil or mechanic engineer can conceptualize, design and assemble.


It must be noted that when the bespoken construction plant finishes its job, normally it has to be scrapped because difficult in storage, maintain finding similar project for reuse. 


c.     Machine, portable and fixed type, mobilization and assembling cost


Most of machines can be transported to construction sites, either by self-driving or mounting on trailer for distance, we call them portable, such as dump trucks, excavators, dozers, loaders, etc. For mixing plants, TBM, tower crane, or machines too big for transportation, they're divided in parts or compartments, and then hauled to the site for erection; we call them fixed type of machine.


Engineers must take into consideration the cost and time required to mobilize, install and demobilize construction machine. Sometimes in the remote or hazardous places disembarkation and the installation of plants and equipment can be difficult, slow and costly that the engineers have to work out the solution.


There is also possibility that the damages will incur to the parts or entire plants during transportation and assembly. Effective protection will take time and cost; commercially insurance policy shall be bought accordingly.


Also, people need to know the value of certain fixed plants decimated very much in single usage, and the remaining value after one project could be only the material cost after dissection.


Even the plant is designed and made strong for reuse, the bulk volume to store and its maintenance requirement during long wait will force the owner to scrape it.




(2) Operation, maintenance and repair.


a.     Owning Cost: Depreciation, Interest, Productivity


In the days when the value of machine and spare parts far exceeded cost of people serving them: operators and crew for maintenance and repair. Only big companies would buy machines as main asset and source of revenue.


For two reasons the machine ownership had to be overtaken by specialty companies:


i). Facing human cost rising, and labor and safety laws fastidious and draconian, only companies able to concentrate effort to manage problems related to operation, maintenance and repair are in a position to handle the machines.


ii). Companies owning big fleet of machine wouldn’t have chances to share costs with other companies as each general contractor compete to get the business.


The machine owning cost, in general, shall be calculated as buying price plus interest payment over the machine's service life and thus obtain the so called flat depreciation cost.


The other is weighted depreciation method, perceiving that the first 2 or 3 years the machine will have high productivity and put the depreciation cost higher in such period.


However, the taxation offices have power to decide the amount permitted for depreciation for each year for different equipment. It affects how the owners should have decided, to charge their equipment.


Interest payment can be considered for each company in total, and outside machine cost calculation.




b.     Maintenance and Repair Cost


Machines need operators to move them, the owners must pay the operators hourly wage and overtime. In addition, machines also need daily, or periodical maintenance; the related cost are the wages of the workers responsible for maintenance and amounts covering for consumable, lubricant and tool.


Repair cost in general is low when machine is new, but it will be accelerated when machine's condition become less fair in the later part of work life. The elements of repair cost consist of two parts: labor, and the other as spare parts.


In developed economy, the repair cost shall be between 100% and 200% of the initial cost according to statistic, depending on different equipment. In order to save labor cost, they’d identify the failed compartment and change accordingly; and in developing countries, the repair workers have to examine the parts more thoroughly and only change the damaged parts as few as possible.


Also, in places where machine price is high compared to human cost, the wage of operator can be 4-5 times of that of manual labor and output of machines will be higher than what can be achieved in advanced economy. Because when machines are relatively expensive, the owners won’t care to pay high wage to the operator as it’s now a small fraction of the revenues from higher productivity.


Right or wrong, the repair workers and operators for construction machines in the developing economies may be more dexterous than their counterparts in developed economies.




(3) Rental and owning.


Started from 70's last century, general contractors ceased to own construction machine and the reasons are: i) investment was big to buy equipment; ii) business opportunity was uncertain over long period; iii) difficulties to handle labor relationship with operators, maintenance and repair workers under the labor law; iv) judgement over replacement or repair of major parts requires specialty knowledge.


It is proven that the general contractors have no way to replace the small entrepreneur for construction machine owning as operation/ maintenance/repair is concerned.


Nowadays in Taiwan where the sense of entrepreneur is high, the equipment rental rates can be as high as buying price of a plant returned in 2 years.




(4) Construction method and machine selected.


a.     Selection of Work Method and Construction Machines.


Designing an efficient construction method is key to successful deliver of infrastructure works: right construction sequence, get through most critical part of work, minimize undue outside interference, and avoid hazardous incident from happening shall be considered when the plan is drawn.


Engineers may have wide range to select machines for the construction projects; however, it will be influenced by the market availability for machine itself and operators. For example, in Taiwan, excavators are everywhere but dozers and loaders not frequently to see as in the cases of North America.


The reasons could be incidental because the people first introduce them to Taiwan just did it inadvertently and others just follow suit. This plus the fact that the local operators can be dexterous to maneuver the machines over the narrow and congested sites explaining fully that the back-hoes are popular in Taiwan.


Number of machine available for rental would draw down the cost thus affecting the user’s choices. Tower crane rental is an example. Because the buildings are now taller and mobile crane as substitute is restrained for occupying too much of the side walk, so the use of tower crane is required. A virtuous cycle is induced proving that the constructor’s practice can be changed for economic reasons.


In Taiwan, when the officials establish budget and draft contract for projects, they need to specify the types and the modes of machine to justify rates and sums. It’s a rationalized process but sometimes inflexible bureaucrat and supervisors will call for the usage of the same equipment appeared in the price breakdown; consequently, causing troubles.


Traditional “build according to the drawing” contracting could be excessive if everything shall be interpreted with “according”. The system has to be liberalized so as not to choke the constructor for their flexibility to select right and inexpensive machines. It also a proof that that the introduction of DB or EPC is necessary.




b.     Machine and Manual Labor


In countries like India, machines face strong competition from man and vice versa. For example, bulldozers and earth moving machine has to be levied with high tariff and surcharges, so that men and their assistant working with spades and dustpan will have chances to outperform mechanized construction.


When we say the civil engineering, and construction is local, choice between man and machine is apparent, because machine absolutely is foreign. When the economy is still under development like India, augment of local employment shall be considered first.


Back to the India construction market, the wages paid to the machine operators won’t be significant compare to the revenue generated by extra output brought by the operator’s better performance. Thus, the wages of operators can be 5 times of the common labors in developing economies.




c.     Cost factors in Prototype and Bespoken Machines


There is situation that prototype machines will not meet construction requirement, the bespoken one will be the solution. For example, when spatial dimensions are particular, physical obstruction needs to be overcome, , or automation required to speed up construction.


But engineers need to know: i). Lead time to design and build the plant is long; they’re not available at once like ordinary plants on the market. Ii). When one part goes down, entire system will idle or fail unless there is spare. iii). Though people will try to re-use it for next project but the chance is slim. iv). The whole value of the bespoken plant can be high and when it scraps after one project, the depreciation allowed can hardly be claimed. V). Turnkey contracts become popular these days; the contractors will have chances to design structures d fit into owned bespoken plant.




3)  Material


(1) Local and Conventional Material shall be chosen for Construction.


a.     Transportation Cost and Locally Available Material


Material for construction is bulky and transportation cost is high, so they have to be obtained from local for maximum extent as quality and property meet the project requirement and not differ much from the outside world.


In fact, the overwhelmed material requirement of a gigantic project may sometimes tilt the supply/demand balance drastically in an isolated area. Investment in term of time and money shall be considered before projects start to assure quality and punctual completion. 


Still, material prices can be fluctuated from time to time either in the case of limited supply, such as aggregate and sand, or as a result of global boom like steel and rebar.  


It can be a disaster to a contractor who doesn’t know how much risk he’s taking in obtaining the construction material for the project he’s bidding. Normally, the contractor staying long in the market will understand that the probability and magnitude of price fluctuation are high; and only the so-called escalation clauses in the contract can offer minimum protection. Or the tenderers must mark up their bid price.


Traditional construction method and material can be available and inexpensive for bulk construction, evidenced by several hundred years of using history. Also as described above, the projects are there for economic development so that the employment of local artisans and labors shall be considered since the design stage.




b.     Continuous Evolution for Material used in Construction


In old days, human's weight lifting capacity was limited, long distance hauling capability also prohibitively expensive and could only go through waterway. People had to use small and light material from local, like timer, brick and mortars for buildings and structures in most of the cases.


Granite and basalt were used in part of Europe especially for churches, castles or monumental structures. Wooden structure was erected in Asia for aristocrats and land lord, but the timber size reduced as a result of deforestation.


In general, the masses had to live in hut and dens for which they built with any material they could pick up from nearby area.


Discovery and use of steel in civil engineering works change the world. They replace traditional construction material resulting in great saving of cost and time. Steel in the form of rebar, sections and strains give buildings and structure new dimensions and spatial aesthetics.


People still think of innovation for construction material better than steel, such as fiber glass or high strength concrete, commercially one day it would be popular as steel used today.





c.     Green Construction


Nowadays, carbon reduction is an issue, the material used in the projects shall be considered climate friendly, and engineers need green knowledge to incorporate construction material made from renewable, waste, or need less processing.


Commercial scheming would be different when the work requirement changes and regulations are revised or the new laws introduced.




(2).   Material and Equipment incorporated into Permanent Project


a.     Project More Sophisticated


As economy advances in a country, the construction work won't be simple structural work again; many systems and equipment will be installed in addition to steel and concrete. So, procurement will be more complicated than simply clearing the composition, dimension and strength of construction material.


When proper delivery of system and equipment, and their installation, operation and maintenance, is desired; prior check and mutual commitment shall be made with reliable makers or specialty contractors even before the contract is awarded.


An experienced general contractor knowing the risk implied in the contract signed with ever demanding client will seek teammates working in different field to discharge the huge responsibility for successful delivery.


Type of cooperation may include consortium, main and sub-tier contractual relationship, or various form of partnership suitable in each case since before the tender.


Between general contractor and system specialty contractor has to be in line with market practice for cooperation; and their undertakings must be complementary at least technically.


b.     Nominated Subcontractor


In practice the owner may actually designate the maker of the system and equipment based on confidence and trust the brand bearers have exhibited. After award, the winning main contractor has to sign the sub or supply contract with the specified makers to overtake the deliver responsibility for their part.


Scope of the subcontract works undertaken by those nominated shall cover the risks begin with engineering, making, shipment, installation, commissioning, test run and operation with main contractor responsible for the interface coordination, progress control, and quality supervision.


Normally, in addition to contingency provision the cost shall include persons assigned for coordination and communication; plus fixed percentage on top of nominated subcontract price for bank guarantees, insurance premium, financial and legal expense.


In other words, the contractor imposed with nominated subcontract work has to share whatever may have gone wrong for the nominated subcontractor under him unless it can prove that the fault is on the Owner’s side since selection of nominated subcontractor.



4)  Money

c. Owner Furnished Material


At times of high inflation, market instability or when owners believe by directly go into supply contracts with the manufacturers or vendors for certain material like aggregate, steel or tiles, they’re in better position to implement the projects. Under the arrangement the contractors will accept money as the handling charge not as much compared to the percent of overhead in the case that they are requested to administer the nominated sub-contract.


In the case of Owner Furnished Material the handing charge is paid supposed to cover the cost that the contractor receiving, storing and keeping properly the material furnished by the owner; and not to cover the overhead and provision needed to complete the contractor’s responsibility according to the contractual conditions as explained above.


But there will be bureaucrats, design consultant, and financing people during budget establishment, reject the idea that the contractors need overhead to handle the nominated subcontract or the handling charge for Owner Furnished Material.


They consider the frontage contractor won't add substantially anything and following up the delivery making everything good and in order is their obligation.


The denying of invisible cost stemmed from the days the economic output mainly counted on agriculture and manufacturing (Physiocracy). The ignorance causes big problem in pushing the works forward; and a further proof that the construction works sometimes need cultural and conceptual fix.




(1)   Payment: cash, in kinds or goods (barter), deferred (BT), franchise revenue (BOT, PFI).


Because the construction contracts are with big money; public or private owners will choose forms of payment according to their financial conditions.


The ways of payment include cash, kinds or goods (barter), deferred payment after completion and transfer to the owner (BT), or through franchise revenue (BOT, PFI).


The contractor must evaluate its own ability to accept the form of payment, for example, when he would have accepted the payment in crude oil over long period, he has to consider oil price fluctuation for long term or bear the cost and the remaining risk to buy the futures.


The reliability of the owners, government or private companies must be taken into account.




(2) Standard international contracts to regulate: FIDIC, NEC3 (New Engineering Contract3), AIA(American Institute of Architects), JCT forms of Contract(Joint Contract Tribunal)...etc.


It's not enough that the contractor will get the owner's pledge to pay him. It depends on the contract conditions through which the contractors get paid.


Normally we'd have type of contracts such as: FIDIC, NEC3(New Engineering Contract3, used for civil works in UK., Australia, New Zealand and Hong Kong, the language of it is simpler and the signing parties are said to be more equal), AIA(American Institute of Architects, form of contract popular in USA.), JCT forms of Contract(Joint Contract Tribunal, for architectural works in UK.)...etc.


As projects are different for each other, the contracts need to be modified to fit the situation; they will be reflected in so called Special Application (or Conditions) and leave the General Application (or Conditions) unscratched.


Whatever slight difference in Special Application will result in big departure in reality so that the contractor needs to read carefully even the author of standard contract or the Owner would have claimed they're the friendliest contract terms.


According to the payment conditions, the contract can be divided in forms like the conventional Rates and Quantity, Lump Sum, Guaranteed Maximum Price, Alliance, Cost and Cost Based, etc.


契約形式甚多,在台灣有政府範本;國際人士許多引用FIDIC,,英國協土木工程多採用NEC3,建築則有JCT範本,美國人則用建築學會之AIA。另依付款形式則有Rates and Quantity, Lump Sum, Guaranteed Maximum Price, Alliance, Cost and Cost Based等。


(3) Non-technical People to Control Money.


Compared to the old days now that big component of contractual money pays for intangible part of the project in the name to protect every party involved. The added value including the cost to acquire money, assure the delivery of the works, O&M of the project and even to the extent to guarantee the products or the purposed functioning of the project will be welcome by the customers. Thus, the added values are created.


But it is true that engineers are not playing the dominating roles in construction business because the invention as said is from improvement of technology, business skill, capital fluidity, that financial, legal and management people intrude and colonize uncompromisingly.


Though money is everywhere (QE?), but they’re dear. It takes so-called experts to invent ideas to attract the capital, they provide guarantees, mitigations and assurance to fascinate investors.


It is the trend, lots of the construction projects are controlled by hordes of non-technical people who can tease the investors.


For example, the government has plain financial resource for construction project and spent almost exclusively for construction related items last century. But now, big chunk of money will be paid as financial cost for BOT and/or PMI as people argue private fund is useful to create more public works for the benefit of the people.


A decent part of money will go to the so called independent third parties for their certificates, report and affidavits at non bargain-able cost (handled by the non-technical people) to ratify the security of capital while the construction hands need to compete each other.


Engineers must realize, somehow, they’re now playing secondary role in the construction project; but because of it they could concentrate in technical matters and become a better manager than people of other disciplines invading the profession.




5)     Market


(1).   Contractors of Lemming Mentality


As it's said above, there're 2,800 strong Class "A" contractors in Taiwan to apportion a small market; the threshold to go into the construction market isn't high as capital (relatively low to the contract amount) is concerned. When they get contracts, the contractors will find many sub-tier contractors more than eager to share risks.


The running cost for a Class "A" contractor is low in Taiwan, the expense will be fee paid to the registered PE, a tiny office, plus a clerk to answer the bell. When the bosses cannot get business, pay such the low cost for "hibernation", will allow them hanging on for long.


The sleeping contractors will wake up when they get contracts and then to recruit managers and engineers to activate the company. Taiwanese people aren’t against shoot and off employment as most of them like to stay in the area like big city or home town.


So, the majority of the contractors are "entrepreneur" type. They're competitive and spiral down ward the awarding price. The practice is not possible to nurture big contractors with know-hows and experience in the market.


But once it is provoked by market turmoil destined to happen every few years, such as sudden sabotage of dump trucks of 1990 (resulted in soil haulage hike and aggregate short supply), or sharp escalation of steel price in 2006, the contractors wouldn’t have sufficient contingency provision will go for broke. The number culled will be significant but it will rise again if there is market re-juvenescence.


The process repeats again and again; the contractors go up and down riding on the changing tides. The ones with bad luck will capsize, but too many of them survive. One moment, the contractors' number will be swelling like lemmings grow to incredible amount in short spring time; the other moment the nature will drive some of them jumping the cliff and the rest follow subconsciously.


The market is still there for another cycle; but the professionals wouldn't have chance to lead the trend while public has to bear most of the cost that speculators should have to pay.




(2) Type of Bid Competition and Evaluation: Lowest Bid, Evaluated Lowest Bid, Value for Money.


The problem of construction industry in Taiwan is over competition. Lowest bid is blamed because under the bureaucratic system the budgets were considered to be right and served as bench mark for the contractors. The winning price was considered as true market cost or the officials follow them shall be subject to official chastisement.


Automatically, people, the budget builders or the tenderers will consider it as a bench mark for similar tenders. Vicious cycle begins and the awarded prices have to wait for another episode close to force majeure for correction; of course, it's always late.


Evaluated lowest bid is taken with the hope that the best contractor and their offer can be selected as the champion to win the tender; however, the selected may not be the most outstanding one, and the judges' supposed imparity is often challenged.


Authorities had sometimes to amend the criteria with the aim that it must be more fitful for particular tender but more susceptible to criticism. So, the evaluated lowest bid system stopped at 2007 in Taiwan, and BOT and PMI also suspended. The lowest bid tendering system prevailed for the next decade.


It is true that in recent years the contractors don't make money. They kept tendering and performed the contracts only to sustain the company. They couldn’t afford to pay senior engineers because of the poor overhead earned; the result is the loss of expertise.


There will be limit to which the contractors take the construction contracts because they can’t make profit after all. The result is tenders "aborted" or the execution in chaos. So, the evaluated lowest bid is coming back. There’s possibility and also a reasonable hope that the authority may get lessons from flaws happened in the past.


The criteria to select the best tenderer for the tender shall be rationalized, especially that the persons to be assigned as "judges“, shall be men of integrity.


Current tendering rules propping the idea for EPC will nurture bigger and more public construction companies instead of the small entrepreneurs who always cut corners of the fair competition is said to be the solution to correct the market for persistent fragmentation.


It could be a well wish and hind sight, but seeing the implementation of FCPA (of the US) and similar laws of various states, the big and public companies can be supervised more thoroughly in the entire process.  


The final goal for government spending shall be "Value for Money", in which, the project completed will worth money spent. It’s idealistic but we suppose the introduction of more liberal ideas, moderate as it may be, will bring in the progress.




(3) Elements of Competition.


A market considered normal will be the one that the consumer is most important. For public works the government is single biggest buyer, he can draw the lines to select the contractors based on their apparent capability, past experience and planned execution plan for the tendered project.


It means the government can define a clear and objective criterion for elements such as price, technical approaches, time of completion, safety record, experience in similar works, existing work loading, managerial and technical resource in hands, records of contract disputes (with owners) …etc.


For international tenders, the owners usually will analyze and evaluate the tenders according to the criteria established objectively. The scores and the tabulation can then be submitted to higher ranking people, maybe people with reputation for review.


The process will avoid complain that the judgement in supporting contract award is made subjectively so as to prevent the outside criticism and interference.


It's true that during the selection of the winning contractor, the authority and invited judges have to "play god" to weed up the weaker or the unfit, and the result maybe that the selected aren’t the perfect ones because many factors are involved during tender and later execution. And in Taiwan, public and the industry may not be patient and easily to find someone as scapegoat.


However, the rules shall be respected and endured for some time to see what if it will change the construction industry players and whether or not that the professionals will be allowed to lead the ring.




(4) Defying the International Norms.


Until now, the developed countries especially Europeans and Americans have big say on the codes, standards, disputes solutions and financial arrangement of the international projects. They are the establishment to enjoy privileges and power more than their competency in the industry.


If the Asian contractors want to go overseas or the western investor coming to their country to build something, they may have the problems to follow specifications and conditions alien to them.


And in recent decades, the foreign owners already accept the idea that the projects need to be guaranteed for their success will go for every detail to ensure nothing will go wrong and therefore favorable the western establishment.


So, despite the new comers may have good engineering knowledge, construction skill and the versatile capability completing the works, they are handicapped in the international construction market, where the established western companies set the rules of the game.


We believe it's not an intended design by any known nations or covenants of them, but it’s difficult, to change the universal conviction soon. Because it’s a capitalist practice that the distrust is used as the excuses to safeguard the people’s interest that the parties involved in the construction contract have to adapt and accept.


2023年4月28日 星期五

 Part 6, Advanced Civil Construction


MT KAO (Blog: http://mtkaoforum31.blogspot.tw/)


7. Resource Required for Project Implementation

1) Man

a. Power to drive Individuals and Organizations to achieve Business Goal:

- Nature of Power 

Man loves power. Unlike animal content with existence and reproduction; human desires are essentially boundless and incapable of complete satisfaction.

A large proportion of the human race is obliged to work so hard in obtaining necessaries that little energy is left over for other purposes; but those whose livelihood is assured do not cease to be active, they look to power and glory. So young people start to drift in the world will wonder why the needs of obtaining the two become imperative for those have something.

The easiest way to obtain glory is to obtain power; this is especially the case as regard the men who are active in relation to public events. The desire for glory, prompts the same actions by the desire for power, and the two motives may be regarded as one.

Power exhibits in many forms, such as wealth, civil authority, and influence on opinion. No one of these can be regarded as subordinate to any other, and there is no one form from which the others are derivative.

- Organization

Among the phenomena featuring construction industry, "Man" is most relevant.  Because people can't be alone to work out big and complicated structure and buildings, they have to be molded into "organizations", to synchronize different expertise and sized up strength, then are capable of serving the society as a meaningful member of construction industry.

To make them functional and contributive, organizations need to be given goals, compatible resource, and rules for participants accepting rewards and punishments as inducements. So, there must be leader(s), hierarchy, and systems in an organization. It means engineers won't be immune from influence of power maneuver, only that an innocent engineering freshman may hesitate to touch.

- Leaders

However, in an organization where technology and experience are crucial to success, naked power manifested on the leader assigned through investment, heritance or tradition without assent of the follow members will have to share power with doyens of superior skill and knowledge for their cooperation. It's the same that commercial people will get their part of power when profitability is major concern. 

When the organizations become big and complicated, power from creeds and over opinions of public will be another origin. As a result, the leaders or candidates for them will be restrained for the power, and the organizations' behavior will have to be institutionalized. 

So, the entire system become more business-oriented at least in this part of capitalist world because we are sure that any organization, public or private, shall perform according to the principle of utilitarianism that worth taxpayer, shareholders or expert's trust. 

- Power Distance 

It takes different guises from person to person, and there's possibility that the leaders may pursue and profit from enacting their own agenda using their naked and traditional power, but it won't be conflicting that the follow employees who gains nothing will be vicariously cooperative as they seem also to share superficial achievements from the leaders.

It's the fact that "genuinely cooperative enterprise" often appeared in Asian countries where "power distance" can be big between each layer of management. In In such an organization the young startups are always taught only to listen and the quest to satisfy their curiosity sometimes will be regarded as offensive, though minor as it is. 

But the deliberation of power in an engineering organization will affect its benefit, loss, even survival. Individuals always humbly don't like to touch non-technical issues and think by doing so they can be shielded from power manipulation of imperious person.

And it is wrong that people pretend they’re apolitical, instead, they’ve to care about the leadership and history of the organizations they want to join or deal with, not least for the reasons to judge and decide whether or not there’re people with whom it’s worth to fight together.

And it has to be noted, as organizations differ in size and type, common to them is the tendency that power sharing inequality will increase as member number increase. It's a confusion to young people who may have justice and fraternity in mind to consider the management in big company is rogue and exploitive. 

The power distance in an organization shall be kept as short as possible because the proportion of self-motivated and highly intelligent workers among the young generation is rising, vision articulation, action orientation, and management-by-exception are required, all depending on good communication.

b. Managerial cadre and their Recruitment:

- Inflated Titles for Professionals

A successful engineering company requires good balance between managers, professionals and occupational. But the balance could only be achieved when number and quality of the "man" employed matched operational requirement.

Among all, loyalties to the company or the boss personally in an industry where small entrepreneurs are everywhere, are most important. It means steady employment that the "man" can be recruited and assigned to work places for required period under reasonable conditions. Qualification to fit the jobs is basic, and more than that, the hired must be trusted for many inter-person deeds taking places every day in construction industry.

In Taiwan, there're 3,148 Class A Contractors, 1226 Class B Contractors, 7465 Class C Contractors, and 566 Specialty Contractors toward the end of 2022. Also not a smaller number of Consulting Firms, Architects and independent PE Offices have been registered.

That it means thousands post of which titles equal to general managers, and senior managers are wanted in the industry. The result is that the construction companies or consultants cannot hire those experienced enough for positions; and people also don't have opportunities to learn management or technical skills required in the career. 

- Recruitment

Under the circumstance, market fragmentation is ensured as many small companies or institutions in the industry struggle for survival. But people still cherish their titles such as vice president, manager or director of the companies even the jobs asking them to do works of more occupational content than professional ones.

The situation further worsens when authority tried to introduce project management system supposed compatible with international practice. Under the system, each position in the project organization requires the license or certificate, which makes the recruitment more difficult.  

Unless there is an overhaul in construction related companies that the vicious cycle to train and hire engineers will be repeating. Make it plain, the decimation of underperformed companies should be required, so that the fragmentation of market can be prevented. Engineers with better disciplines, grade, and initiative, will be able to work in more neat, clean and efficient 21st century construction industry.

- Diploma Over-Trump Proficiency

Conventionally, general public always considers diploma is equal to people's ability and it compels the authority to accept the idea that expertise can be tested through examination. And it turns out, the project owners and the parties responsible for supervision wouldn’t look into the true curriculum of job candidate. 

The outcome that bureaucrats waive their objective judgement to evaluate the real capability of proposed project staff, is that they have to use dull and useless contract stipulation to fortify their essential requirement in work safety, quality and progress; only to torment the submitting contractors.

c.  Professional and Occupational 

People working in the industry understand the difference between Professional and Occupational is whether or not they’ll use brain all the time. However, they must be aware a professional can easily and unconsciously become an occupational. 

The situation may include they practicing routine and unchallenged work too long, or simply losing the brain power to reason and judge.

Always the changes in the market or industry will bring in the impact, that people have to wary if their income are hardly raised or the employers asking for more training and test for the same job they’ve carried out. 

d.   Project-based or Department-oriented (functional) Management:

- The General Contractor’s Shrived HQ

As it evolves, emergence of the subcontractors to undertake the field work in lieu of the main contractor becomes a trend seeming irreversible. And when competition goes further, many of the main contractors withdraw to the point that they don't keep sufficient engineers to stay in lowest notch of expertise. 

The educated retained by the companies won't divide the works in line with disciplines, levels and grades truly demanded by the complicated system.

The recent project management system imposed by government to supervise the public work has an intention to assign more engineers for various discipline of construction so as to develop expertise for engineers over the course. 

But the companies cannot follow because elaborated and calibrated division of the works require more engineers to fit the jobs with more salary to pay thus weaken the parties' competence. Also, it's a realty that there're more than10, 000 constructors, consultants and architects in a small market busy for engineer recruitment.

All combined together, the general contractor’s will always be undermanned and have a shrived HQ.

- Project-based Management, Functional department-oriented Management.

Only a few companies in Taiwan have fortune to expand their organization into big, and sophisticated matrix structure, in which both project-based and functional department-oriented management co-existed and support each other.

As we’ve shown above, many entrepreneur-led companies with limited business volume have to adopt project-based management, of which, the practice is to assign people to site offices meeting minimum requirement imposed by the client. 

The project offices are presumed to gain technical and management backup from knowledgeable engineers in each functional department, however, it couldn't be done as fierce competition to get the tender has hallowed head offices; we saw the veterans disappeared over time.

Consequently, people are reduced only to work on projects of which the design and construction are general and routine because they don't hold engineers capable of developing know-hows of projects. But in reality, the companies have to establish for the project something similar to matrix organization to furnish the required support provided by both project-base and functional department-oriented system. 

- Design an organization adapted to the actualities and open to the future development 

According to Max Weber (German Philosopher and Sociologist), an organization can be designed in consideration of the following:

* Task specialization: Tasks are divided into simple, routine categories on the basis of competencies and functional specialization.

* Hierarchical layers of authority: Managers are organized into hierarchical layers, each responsible for its staff and overall performance.

* Formal selection: Employees are selected on the basis of technical skills and competences, acquired through training, education and experience.

* Rules and requirements: Employees know exactly what is expected of them. In this sense, the rules and requirements can be considered predictable.

* Impersonal (Impersonality and Personal Indifference) : Regulations and clear requirements create distant and impersonal relationships between employees, 

* Career orientation: Employees are selected on the basis of their expertise, deployment of the right people in the right positions and thereby optimally utilizing human capital.

d. Personal and organizational behaviors:

-  Company Culture related to Size

Personal behaviors are different from person to person, also in different time for the same person. When an organization is formed, it behaves as a person but like persons it will have different faces overtime. It depends on the leaders very much; especially the way he handles coordination and communication. 

Organization mainly consist of engineers and ruled by them can be stiff and fastidious in giving orders and executing them. The reason and the result maybe it need to avoid mistakes and at the same time push things forward. 

But people with more liberal or creative thought may not appreciate and can be shut put; not good to business development and technological innovation. To mitigate that, a motley style of coordination and communication in a big company is highly valued.

-  High and Low Context Cultures

When organization is small, cultures can be defined as "high context”, more inclined toward relational and collectivist. Message can be spread effectively aiding by gestures, relations, body language, verbal messages, or non-verbal messages between individuals.

But when organization grows big, communication shall be more explicit, direct, and elaborate; because under the circumstance the individuals are not expected to have knowledge of each other's histories or background, and communication can't be shaped by long-standing relationships between speakers. They depend more on the words being spoken rather than on the interpretation of more subtle or unspoken cues. In such case, the organizations need low context culture.

"High" and "low" context cultures typically refer to language groups, nationalities, or regional communities. However, they have also been applied to corporations, professions and other cultural groups. Though not all individuals in a culture can be defined by cultural stereotypes, it can roughly classify: 

In elementary school, classmates and teacher fixed in the same classroom all day know each other; it is high context. In the university, professors and classmates come and go, interactive only in the class; it is low context.

In smaller companies, boss know every employee, give orders and evaluate performance himself; it's high context. In big companies, management layers are many, the communication needs to be made in meetings with minutes or written mails, power must be delegated and the bosses are distant; it is low context. 

The lawyers and accountants talk and writes to identify the truth, and it must be precise in words and numbers, they're of the lower context; the engineers and businessman next, while the farmers deal with the same lands and climates for life can be higher context.


In nations or societies where the benefit of group is emphasized over individual, higher context cultures dominate, such as the Asian countries, probably an extension peasantry economy. While mercantile vigor were developed in European and North American countries; it can be lower context. 

People grow up in different context of culture will have distinct response toward the organization which he is hired; however, he can judge how or whether or not he can adapt or fit in the career, if he has the sense about the cultural context. And it is possible that people can change his thought and behavior when he is young.

e. Labor laws, quality, incentives, and unions


- Labor and Taxation Laws in Taiwan

Working at site as construction people or supervisors will have to follow the weather instead of the calendar for their agenda. 

There's considerable improvement for employees on the aspect as labor law and regulation interfere; but the employer especially the big companies may not be able to observe to the law completely. It's also one of the reasons that sub-contractors and work gangs are introduced to the project for execution as they may be more "flexible' to follow the law. 

More than law abiding for overtime assignment, smaller company in Taiwan can pay corporation tax in deemed amount in exchange of lax scrutiny into their books. It means sometimes they can neglect or under report their employees' personal tax, retire fund or health care premium. And beyond monetary evasion, they can be audaciously to recruit employees especially for foreign blue collars not obtaining legal stay permit. 

A well-organized company in construction industry will consider laws amended in favor of employees are draconian, and tend to be meticulous toward recruitment even for white collar professionals. So, when construction or design companies have to rely on dispatched people to fulfill minimum contract requirement, they actually leave the responsibility to lay off people to manpower dispatch agencies; which is big departure to the professionalism.

- Taiwan’s Scrupulous Professionals 

In Taiwan, a few professionals have problem to develop expertise. They lack patience to pursue the knowledge and expertise. They incline to accept jobs their quest of titles and income for short term benefit. So, they put more attention on employment conditions more related to income, welfare and work places. Some of them may need to share with spouse for family chores and tend to work on regular hours. 

We learn that the professionals are working with their brain and are hardly quit the job for entire 24 hours a day. It means if they can cut clean with the work after office hour, they’re not better than any occupational for at all. 

There could be a compromise likely to be reached with an irresponsible employer to sacrifice the work quality, but, and it opens the chance for those don’t have formal engineering background to fill the vacancy; thus, a degradation of professionalism.

Yes, it’s an industry that toil and sweat still overwhelm the brain-exhausting work style and leaving rooms for occupational. But the projects management system, public or private, continue to request the inclusion of certificated and licensed engineers, then people having engineering education and training may have chances to claim their dominance.