The Framework of the Construction Industry Report

Introduction

The construction industry is a mirror of society, which includes different sectors within itself. By analyzing the sectors one can see which of them is the most popular and, therefore, is the most perspective. The construction industry in the UK is having a period of strong growth. Four sectors can be determined in this industry: house building, infrastructure, industrial construction, commercial construction.

House building

In 2000 house building accounted for 38.6% of the whole construction industry’s output. Out of this number, the amount spent on public housing usually has never exceeded £2bn but at the same time, the figure for private housing has been double or even triple of that amount. House building output is forecast to be increased by 19% between 2001 and 2004.

Infrastructure accounted only for 9.2% of all construction work which was made in 2000 – this figure is slightly lower than for the previous 4 years. The main source of infrastructure work is road building, in particular, The National Audit Office revealed that 51% of road-construction contracts (which worth more than £434m) – were won by five firms: Balfour Beatty, Budge, Alfred McAlpine, Fairclough, and Tarmac.

If one looks at industrial construction, it can be noticed that it is one of the smallest sectors in the construction industry. The output of private construction work was only £3.7bn, or only 5.3% of the total construction sector in 2000 (Pheng, Low, Kwang, 2005)…

At the same time, commercial construction output with a wide variety of commercial work accounted for about 18% of all of the construction works in 2000. (Pheng, Low, Kwang, 2005). So, it can be concluded that the UK’s construction industry is having a period of strong growth. Regardless of the rapid growth of other sectors, the housebuilding sector makes up a huge part of the whole construction industry in the country. It means that cultural, political, and economic factors in the UK allow the construction industry to grow, consequently, the country has a great potential for capital investments in this industry.

Managing a small business – resources, finance, and technologies.

As a type of the popular models used in practice to form a small business, I chose Limited Liability Company (LLC). This company does not only design but also conduct the construction process according to the design, which was made.

A limited liability company is a type of business ownership that combines several features from both corporation and partnership structures. At the same time, LLC is not a corporation or a partnership business. The number of members is unlimited and can include other individuals or corporations, or even other LLCs (Bosch, Philips, 2002).

Advantages in choosing the model of Limited Liability Companies

There are many advantages in choosing the model of Limited Liability Companies. The first undeniable advantage of LLC is that the owners of this model have the protection of its corporation. An LLC exists as a separate entity much like a corporation, where members are not personally responsible for their debts unless they have signed their guarantee. Another advantage of this model is the Flexible Profit Distribution. It means that limited liability companies can select different forms of distribution of profits, for example: if in a common partnership profits have to be split 50-50 (Bosch, Philips, 2002)., LLC has much more flexibility in dividing the profits. The LLC business structure doesn’t require any resolutions, and that is why LLC is easier to operate. All your business profits, losses, and expenses go through the company to each member. So such an organization of processes aims to avoid double taxation or pay both corporate and individual tax.

There are also some disadvantages of the chosen model. It is important to realize that the life cycle of an LLC is rather limited. The death of bankruptcy of an LLC member can lead to negative consequences on the overall performance of this company. One more disadvantage of this model is the great amount of paperwork, which is required to run a successful LLC.

The typical fee can be established in some ways. These ways depend on the type of project and on the extent and nature of services that are required from an Architect. Common methods of compensation to the Architect would include: hourly rates, a stipulated sum per unit of what is to be built (i.e., the number of rooms or square feet), a sum based on the Architect’s compensation proposal, a percentage of construction costs, or a combination of all of these methods.

Moreover, one has to keep in mind some factors that might affect the fees, including the level of quality and detail, the scope of the project, and economic conditions. Analyzing the described situation, when the company does not only design but also conducts a construction project, – the fee submission to a client would include: Construction Cost, Architect’s Fee, Landscaping, and Driveway if necessary (Bosch, Philips, 2002).

International Accounting Standards

To manage the flow of money in and out of the business one needs to remember about the International Accounting Standards (IAS). According to these standards, the accounting department has to keep a lot of different records and documents. Some of them include the following documents: balance sheet – is a statement of the book value of all of the assets and liabilities (including equity) of a business; Income Statement – is a financial statement for companies which indicates how money received from the sale of services and products before expenses are taken out; Cash Flow Statement – is a financial statement which shows incoming and outgoing money during some period (usually monthly or quarterly); notes to the Financial Statements and other documents. These reports will help to manage the flow of money especially if all of these records are carefully kept and regularly updated.

Process of hiring employees

To hire some employees in the Company one has to keep in mind few factors. Employee Policy has to be prepared (Bosch, Philips, 2002). The purpose of company policy for employees is to provide all necessary instruction for employees on their performance and behavior at their workplace. The Employee Policy has to be presented during the hiring session. This document would normally include the notice on his or her duties, salary, promotion or demotion, relocation and all items regarding his or her work; notice of inappropriate acts; notice of proper handling of confidential information; notice of ownership of work product (the Policy should include a statement to an employee that all of his work product and all of his intellectual property rights of this work, is owned only by the company and not to be used by them outside of their work or even by their future employers). Some policies may include an agreement by employees not to work for competitors of the company. All employees have to be legally registered and are required to pay the necessary taxes.

There are many different ways which would help in supporting a commercial activity of the Company. Modern Information Technologies (IT) allows us to use computer systems that would ease the job of an Architect or even the whole Company. The internet technologies can be used in various ways: to help the Company in advertising its services and products; they can help communication and negotiation with clients to be quick and smooth; also they can advance communication between the employees within the Company (Bosch, Philips, 2002).

Software programs

Furthermore, there are a lot of different software programs which can be very helpful in running the business, for example, Information Management System (IMS). Information management systems are divided into four levels: operational level, knowledge level, management level, and strategic level (Thierauf, 1999). The most suitable system for LLC is the Operational system that aids the managers by tracking elementary activities and sales transactions of the company. The primary objective of this kind of information system is to keep the flow of transactions through the company. In Transaction – Processing Systems (TPS, the five basic needs of the company are normally covered: finance (cash management), accounting (payroll, accounts payable, accounts receivable), sales and marketing (order tracking and order processing), activity (machine control, time scheduling, material movement), and human resources (payroll, training and development, employee record keeping). TPS is the basic business system that aids in the daily routine operations of any LLC (Thierauf, 1999).

Legal, Statutory, Contractual, and Procedural Aspects of Building Practice

The letter given to the contractor should include all related to construction procedure items and describe the contractor’s obligations and fees according to the obligations.

The first and one of the main subjects in the construction business is defining and approval of the parties (builder, consultants, and others) involved in the activity (Cohen, 2002).

The approval is carried out through the tender process. The customer should be acquainted with tender process regulations and basic principles of tender proposal formation. Also, there are several statements the Customer should be aware of the fact that for private contractors (including LLC stated earlier), the threat of bankruptcy, or actual bankruptcy, will lead to (often very sudden) termination of the contract. The Customer should follow an evaluation procedure that will provide all the necessary information about the tenderer. Traditionally, the detailed evaluation procedure has fallen into two distinct parts:

• technical: assessing the tenderer’s proposals for delivering the service;
• financial: an accurate assessment of the commercial viability of the bid.

Technical evaluation

Each tenderer needs to be examined in the following categories:

• staffing: numbers, caliber, experience;
• management structure;
• operational procedures;
• marketing plans;
• understanding of the work;
• innovation and flair.

It is then necessary to score each tender in each category. A simple way would be to give marks out of 10 to each category. Thus one tenderer may score 6 out 10 for staff, while another may score 8. A method of scoring encourages greater objectivity in the evaluation (Cohen, 2002)… Subjective judgment has to be avoided.

Financial evaluation

The tender offers must be examined for:

• arithmetical accuracy;
• an analysis of the costs included;
• acceptability of the profit margin;
• the sufficiency of the contingency sum;
• the credibility of the income forecast.

Quality specifications

The balancing point is usually divided between finance and quality at 35% to finance, 65% to quality. The headings pointed below are by the service and quality specifications:

• staff proposals;
• program;
• health and safety;
• marketing;
• technical competence;
• management.

However, a contractor’s submission could not afford to ignore non-financial considerations. The Customer may expect two possible problems:

• a contractor would cut costs below those required to run the service properly;
• an attractive bid could be submitted by including an unrealistic level of income.

Validity

Once the evaluation model had been created it should be agreed with an internal audit and submitted to District Audit (the authority’s external auditors). The most complete documents should include (Sebestyén, 1998):

• financial data and working papers;
• management and bid philosophy;
• management objectives;
• detail set out as per assessment criteria;
• procedural documents;
• health and safety procedures;
• marketing plans;
• programming proposals;
• references.

Technical Approvals that may be necessary to legally complete the project and are usually devoted to the principles which provide health and safety of people in and around buildings and energy conversation (Halsey, 1999).

The regulations apply to buildings, whether domestic, commercial, or industrial. Many construction projects also require planning permission which is dealt with as a separate kind of work.

Typical documentation needed according to building regulations

All the documentation on a building’s construction, including its structure, fire safety, sound insulation, drainage, ventilation, energy conversation, electrical safety, and energy efficiency in buildings. The needs of all people, including those with disabilities, in accessing and moving around buildings. All the regulations set standards for buildings to be accessible and hazard-free wherever possible (Halsey, 1999). Taking into consideration all the points precautions listed previously the Customer can draw up a contract that meets all the requirements of the parties involved (Halsey, 1999).

Self-management and appraisal of working practices

For architects, self-management is an essential part of their job. Self-management refers to skills, methods, and strategies by which an individual can effectively direct his activities toward the achievement of objectives, including goal setting, scheduling, planning, etc. The concept of self-management is based on social theory.

Conducting architectural projects, an architect will be required to manage his/her time wisely, on the other hand, the manager of the architectural department may face the problem of successful management. To avoid these potential problems, architects should use the essential components of management.

The successful process of management consists of six integral components of managing the individual time of architect(1) The system of assessment – it includes systematic data which is gathered to assess the effectiveness of an architect, in particular, whether he/she is meeting the deadlines or whether his/her designs are meeting the requirements of the client. (2) Goal setting helps to plan and set specific goals, and coordination the work of the team, which consists of architects with different styles and educational backgrounds (3) Process of monitoring is the process by which a manager controls the quality and effectiveness of architects’ projects. (4) Evaluation of an architect’s results is a powerful method for enhancing the effectiveness of management techniques. (5) Written contract signed with architects by the employers of architectural company, which is an agreement that specifies plans, expectations of the employer, and architect’s responsibilities and rights. (6) And the last, but not the least component is maintenance, which is a critical test of the usefulness of management training. Self-management helps to avoid different problems. One of them is paying extra money for the delay of the project. If an architect does everything on time (according to the contract) then the contractor doesn’t have any rights to claim extra money (Sayers, 1997).

Communications and presentation

The process of preparation for the interview, the interview itself, and decisions made after it are important components of choosing a future career. To be employed at a “dream job”, it is essential to obtain the degree of one’s future field together with good knowledge and understanding of the future profession. A prospectus is a tool that helps to “advertise and sell yourself” to potential employers, so the description of one’s completed courses and personal achievements should be reflected in the prospectus (Sayers, 1997).

The interview is a chance for the employer to meet potential candidates in person, so the employee should prove that he/she can meet the company’s needs successfully, and the company would benefit by recruiting this particular person. The importance of post-interview steps is often neglected, however, a successful employee should keep a record of all the companies he/she has applied at, analyze his/her mistakes made during the interview to avoid them later, and continue deepening knowledge of the studied field. Here is an example of the prospectus, which can help me join the team of architects of the certain company.

Prospectus

A successful candidate, your name, for the position of the architect in the architectural department of the employer’s company will planning, organizational, and designing processes of this company.

Your name, who graduated from Z. Private School in 2004, has already obtained a significant amount of skills and deep knowledge of her subject being in her 3d year in BA Hons Architecture (RIBA Part I).

A rich variety of courses and rather high grades received upon their completion is the best proof of professionalism of your name, in particular:

• Year 1: Introduction to Architectural Design (double): B+, Architectural Representation: A, Introduction to Architectural Psychology: B, Architectural Design in Context (double): B+, Introduction to Architectural History and Theory: B+, Introductory Technology: B.
• Year 2: Technology and Sustainability B+, Interdisciplinary/Practice: B+, Architectural Design 1: Integrating Landscape (double): B+, Architectural Design 2: Integrating Technology (double): B+, Digital Culture: B+, Issues in Architectural History and Theory: B+, Psychology of Light and Colour: B+.
• Year 3: Architectural Design, Advanced Technology, Architectural Design 4), Preparation for Practice.

The theme of the Final Year Dissertation is “The Architecture of Fashion: The Intersection of Architecture Lane and Fashion Avenue”, so this candidate possesses creative skills in architectural design.

Your name‘s computer skills are on a high level since this candidate has a good knowledge of the following programs: Word, PowerPoint, Excel; Adobe: Photoshop, Illustrator; Basic knowledge of 2D AutoCAD and Microstation. The candidate has practical experience in applying her computer skills to the subject of her study. One more undeniable advantage of your name is your fluency in the Greek language and a quite high level of English and German languages.

This candidate has a rich background of involvement in the area of arts and design, in particular: studying photography for 4 years, together with the practical application of this course, also creating freehand and technical drawing, with a special interest in illustration, engraving, creating graphics with adobe programs and sketching.

The interest and hobbies of the candidate are mostly connected with her subject of study – architecture. Madeleine Vionnet, a fashion designer of the 1920s-1930s, inspires your name with her sculptural and unique design. Your name believes that such classic works of architects like Paul Rudolph, and more recent works of Zaha Hadid, Fernando Romero, Frank Gehry, Shuhei Endo, Toyo Ito, and Sugeru Ban helped the candidate to determine her architectural style and enhance her understanding of both classical and modern architecture.

The architectural style of a candidate is mainly minimal in forms but with the usage of angles, continuing surfaces to give the viewers the feeling of unified circulation throughout the spaces. Rich experience of traveling and learning new cultures helps candidates in creating unique and innovational architectural designs.

Conclusion

To summarize, a great variety of obtained skills and a deep understanding of study should convince the employer that recruitment of this candidate in the team of its architects will help this company benefit and advance its further development.

References

Bosch, Gerhard and Peter Philips, eds. 2002. Building Chaos: An International Comparison of Deregulation in the Construction Industry. London: Routledge. Book on-line. 2007. Web.

Cohen, John M. 2002. Measuring Safety Performance in Construction: Can Business Growth and Improved Safety Performance Go Hand in Hand? They Can When a Company Makes Accountability a Key Ingredient. Occupational Hazards, 41+.

Halsey, Gordon J. 1999. Planning for Safer Construction Projects. Occupational Hazards, 43+.

Pheng, Low Sui, and Goh Kim Kwang. 2005. ISO 9001, ISO 14001 and OHSAS 18001 Management Systems: Integration, Costs and Benefits for Construction Companies. Architectural Science Review 48, no. 2: 145+.

Pheng, Low Sui, and Jasmine Ann Teo. 2003. Implementing Total Quality Management in Construction through ISO 9001: 2000. Architectural Science Review 46, no. 2: 159+.

Sayers, Philip. 1997. Competitive Tendering: Management and Reality : Achieving Value for Money. London: E & FN Spon.

Sebestyén, Gyula. 1998. Construction: Craft to Industry. London: E and FN Spon. 2007. Web.

Thierauf, Robert J. 1999. Knowledge Management Systems for Business /. Westport, CT: Quorum Books.